Margaret has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host. Since she does not know much about wine, she will likely use the price of the wines as:. a. an indicator of the variety. b. an indicator of quality. c. a measure of scarcity. d. a reflection of status quo pricing. e. a measure of the income effect.
b. an indicator of quality.
Explanation: Margaret has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host. Since she does not know much about wine, she will likely use the price of the wines as an indicator of quality.
Value-based pricing is a strategy of setting prices primarily based on a consumer’s perceived value of a product or service. Price is an Indicator of Value From a consumer’s standpoint because it is often used to indicate value when it is compared with perceived benefits such as the quality .
Roshika has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host. Since she does not know much about wine, she will likely use the price of the wines as an indicator of quality. Explanation: Roshika’s idea of gifting a bottle of wine to the host of the party is quite generous, but, a problem she is facing while buying wine is that she doesn’t know much about good wine. To overcome this problem she has a common solution adopted by a majority of people in today’s world of economy, she is using the price of the wine as an indicator of quality. This means that the higher the price of the product, higher will be its quality.
The correct option is B, an indicator of quality Explanation: Premium brands are highly priced goods that command leadership status in their market segments because they are perceived to offer basic brand’s benefits as well as additional benefits to consumers. In identifying these type of brands, their prices could be a signal to their high-end status. Option A is wrong because high price tells nothing about the variety of a brand. Option C, a measure of scarcity , is also a deviation from the point,as price does not give any information concerning scarcity of an item,especially when item is a luxury brand and not a basic necessity.
