Different Brands Within a Company's Product Line Generally Have Different

Multiple Choice

Different brands within a company's product line generally have different profit margins; higher price lines have higher profit margins. For example, Nike Variety tennis shoes have variable costs of $6 and sell for $24; whereas, Nike Wimbledon tennis shoes have variable costs of $10 and sell for $48. It must be true that:

A) Nike is using a cost-plus percentage-of-cost pricing strategy.
B) demand is unrelated to product quality.
C) Nike is using a price lining strategy.
D) demand is unrelated to price.