A breakfast cereal company makes a product Topbran, which costs $6 and is rated 8/10 on taste. Its major competitor, Crunch, costs $4 and is rated 5/10 on taste. The company is considering making a second, decoy product to persuade consumers to choose Topbran over Crunch. According to the theory of asymmetric dominance, which of the following characteristics would describe a decoy product for the company? a. Price = $8, Taste = 6/10 b. Price = $2, Taste = 7/10 c. Price = $5, Taste = 6/10 d. None of the above.
A breakfast cereal company makes a product Topbran, which costs $6 and is rated 8/10 on taste. Its major competitor, Crunch, costs $4 and is rated 5/10 on taste. The company is considering making a second, decoy product to persuade consumers to choose Topbran over Crunch. According to the theory of asymmetric dominance, which of the following characteristics would describe a decoy product for the company? a. Price = $8, Taste = 6/10 b. Price = $2, Taste = 7/10 c. Price = $5, Taste = 6/10 d. None of the above.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
A breakfast cereal company makes a product Topbran, which costs $6 and is rated 8/10 on taste. Its major competitor, Crunch, costs $4 and is rated 5/10 on taste. The company is considering making a second, decoy product to persuade consumers to choose Topbran over Crunch. According to the theory of asymmetric dominance, which of the following characteristics would describe a decoy product for the company?
a. |
|
|
b. |
Price = $2, Taste = 7/10 |
|
c. |
Price = $5, Taste = 6/10 |
|
d. |
None of the above. |
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