Answered: With the aid of a diagram, explain the…

With the aid of a diagram, explain the meanings of ‘pecuniary price”, ‘non-pecuniary price’ and “full-economic price”, explain with a valid example.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 3SCQ: Explain all the reasons why a decrease in a products price would lead to an increase in purchases.

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Concept explainers

Product and Price Bundling

Product and price bundling is used as a marketing strategy by businesses, where complementary products and services are combined and sold as a package deal. This bundled price is usually less than the total price of the individual products if they were to be sold separately. When bundled and sold, each product is sold at a reduced price. Using a price bundling strategy helps increase the average revenue per user and also increases the engagement with the user. This happens as the perceived value of the bundled products is more than the individual products.

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With the aid of a diagram, explain the meanings of ‘pecuniary price”, ‘non-pecuniary price’ and “full-economic price”, explain with a valid example.

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