ADD ONS ACCESORIES AND COMPLEMENTARY PRODUCTS

Question 1

is an additional charge
for a feature or service that is not
included in the base price.

Answer 1

ADD ON PRICE

Question 2

argues for a low price on popular or
frequently purchased products to induce
purchase of less popular or infrequently
purchased items that are priced to yield a
higher relative contribution margin

Answer 2

SIGNPOST EFFECT

Question 3

is the
practice if pricing of a base product
relatively low to capture customers while
simultaneously pricing the tied
complements relatively high due to a
lower price sensitivity of customers for
these add-on units.

Answer 3

OPTIONAL EQUIPMENT EFFECT

Question 4

products are
said to benefit from network externalities
when the value of the product increases
with the number of people who use it.

Answer 4

NETWORK EXTERNALITIES