Question

Using the _____ pricing method, consumers may be willing to pay more for a particular product because, over its entire lifetime, it will eventually be less expensive to own than a cheaper alternative.

Answer 1

The pricing method described in the question is known as life-cycle costing. With this method, consumers may be willing to pay more for a product that will be less expensive to own over its entire lifetime compared to a cheaper alternative. Consideration of the long-term costs and benefits promotes sustainability and reduces environmental impact.

Step-by-step explanation:

The pricing method described in the question is known as life-cycle costing. With life-cycle costing, consumers may be willing to pay more for a particular product because, over its entire lifetime, it will eventually be less expensive to own than a cheaper alternative. This method takes into account not just the initial purchase price, but also the costs of maintenance, repairs, and disposal.

For example, let's say there are two laptops available for purchase. Laptop A is cheaper, but it has a shorter lifespan and requires frequent repairs. On the other hand, Laptop B is more expensive, but it is designed to last longer and has a lifetime warranty. Over time, the total cost of owning and maintaining Laptop B may be lower than the cost of constantly repairing Laptop A, making Laptop B a more economical choice.

Life-cycle costing encourages consumers to consider the long-term costs and benefits of a product rather than just the upfront price, promoting sustainability and reducing environmental impact.