Question

According to the article you read, movie theaters have added more upgrades and enhancements (e.g. reclining seats, new food choices, new screens, new sound systems) to justify higher ticket prices. This is an example of ________ pricing.

Answer 1

Value-Added Pricing

Step-by-step explanation:

Value-added pricing: It is one of the pricing strategies that focus on how customers perceived the value of the product and how much they are willing to pay for it. The cost of production does not decide the price of the product in this case, however, it is a difference between perceived value by the customer and the cost of production. Value is created by the utility of the product to the customer.

In the given case, Movies theater has added value to the experience of watching a movie in theater by up-gradation and enhancement in facilities to justify higher ticket prices, which is an example of Value-added pricing.