ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A “bait and switch” is a scam to mislead buyers, whereby a seller advertises an appealing but ingenuine offer to sell a product or service that the seller does not actually intend to sell. Instead, the seller offers a sub-par, defective, or unwanted alternative.

Detailed explanation-2: -In a predatory pricing scheme, prices are set unrealistically low in order to eliminate competitors and create a monopoly. Consumers benefit from lower prices in the short term but suffer in the long term as the successful predator has eliminated choice and is free to raise prices.

Detailed explanation-3: -When customers attempt to buy the television at the advertised price, they are told it is out of stock and offered a more expensive unit for $999. This is likely to be bait advertising as the retailer does not have a reasonable supply of the advertised television.

Detailed explanation-4: -Penetration pricing is a strategy used by businesses to attract customers to a new product or service by offering a lower price initially. The lower price helps a new product or service penetrate the market and attract customers away from competitors.