Multiple Choice
If total spending rises from one year to the next, then which of the following must be true?
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5. Consumer and Producer Surplus; Price Ceilings and Floors
Consumer Surplus and Willingness to Pay
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What is the economic term for the practice of pairing several products together and selling them for less money than each would cost individually?
A
Arbitrage
B
Price discrimination
C
Bundling
D
Market segmentation
Verified step by step guidance1
Understand that the question is asking for the economic term describing the practice of selling multiple products together at a combined price lower than the sum of their individual prices.
Recall that 'Arbitrage' refers to buying and selling the same good in different markets to profit from price differences, which is unrelated to product packaging or pricing strategies.
Recognize that 'Price discrimination' involves charging different prices to different consumers for the same product based on willingness to pay, not necessarily bundling products together.
Identify that 'Market segmentation' is the process of dividing a market into distinct groups of buyers with different needs or behaviors, not the act of selling products together.
Conclude that the correct term for selling several products together at a discounted combined price is 'Bundling', which is a common pricing strategy in microeconomics.
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