A breakfast cereal company makes a product Topbran, which costs $6 and is rated 8/10 on taste. Its major competitor, Crunch, costs $4 and is rated 5/10 on taste. The company is considering making a second, decoy product to persuade consumers to choose Topbran over Crunch. According to the theory of asymmetric dominance, which of the following characteristics would describe a decoy product for the company? a.   Price = $8, Taste = 6/10 b.   Price = $2, Taste = 7/10 c.   Price = $5, Taste = 6/10 d.   None of the above.

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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A breakfast cereal company makes a product Topbran, which costs $6 and is rated 8/10 on taste. Its major competitor, Crunch, costs $4 and is rated 5/10 on taste. The company is considering making a second, decoy product to persuade consumers to choose Topbran over Crunch. According to the theory of asymmetric dominance, which of the following characteristics would describe a decoy product for the company?

a.  

Price = $8, Taste = 6/10

b.  

Price = $2, Taste = 7/10

c.  

Price = $5, Taste = 6/10

d.  

None of the above.

 

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