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A common marketing tactic

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solution


Question

A common marketing tactic among liquor stores is to offer their clientele quality (or volume) discounts. For instance, the second leading brand of wine exported from Chile sells in the United States for $8 per bottle if the consumer purchases up to eight bottles. The price for each additional bottle is only $4. If a consumer has $100 to divide between purchasing this brand of wine and other goods, graphically illustrate how this marketing tactic affects the consumer?s budget set if the price of other goods is $1. Will a consumer ever purchase exactly eight bottles of wine? Explain

 

Paper#26472 | Written in 18-Jul-2015

Price : $22
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