Question

Barry's is a chain of retail stores that stocks a large variety of goods and practices high-low pricing. This means that Barry's is likely to ________.

A) have low volume and low markups
B) charge low prices constantly
C) offer numerous sales or discounts
D) compete on the basis of price rather than product or service quality
E) use predatory pricing to eliminate competition

Answer 1

Barry's, using high-low pricing, is likely to offer numerous sales or discounts. This strategy involves initial higher prices with strategic markdowns, distinct from constant low pricing or illegal predatory pricing.

Step-by-step explanation:

If Barry's is a chain of retail stores practicing high-low pricing, it means that Barry's is likely to offer numerous sales or discounts. High-low pricing is a strategy where a retailer initially charges higher prices, but then offers significant sales, markdowns, or discounts, giving the impression of savings to consumers. This approach is different from everyday low pricing, where prices are consistently kept low, and it is also distinct from predatory pricing, which involves temporarily slashing prices to an unsustainable level to drive out competition, which is illegal.

In the context of high-low pricing, Barry's would not be focusing on constantly low prices, nor on price competition alone. Instead, it would seek to attract customers through the appeal of periodic sales, giving consumers the thrills of bargain hunting and the perceived value certain discounts offer.