Pricing products that must be used along with a main product, such as razor blades for a razor handle or ink cartridges for a printer, is known as:
ABy-Product Pricing
BOptional-Product Pricing
CProduct Bundle Pricing
DCaptive-Product Pricing
Explanation
* Captive-Product Pricing sets a low price on the primary durable hardware while applying high profit markups on required supply accessories.
* By-product pricing sells waste/byproducts; Bundle pricing combines products; Optional pricing prices extra add-on accessories.
* This model is widely known in business strategy as the ‘razor-and-blades’ revenue model.
Exam Relevance
- Topic: Pricing Strategies
- Subtopic: Product Mix Pricing

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