In the Printer and Cartridge Market,key Challengers Are Unable to Undercut

Multiple Choice

In the printer and cartridge market,key challengers are unable to undercut the very low prices offered by the market leader,Hewlett Packard (HP) .However,HP charges relatively high prices for replacement cartridges ($50-$80 each) .In an effort to gain ground in this highly competitive market,Canon,using the insight that customers resented the high prices of printer cartridges,saw an opportunity to compete on prices for ink-jet cartridges and came up with a very fair offer of $12 per cartridge.Both Hewlett Packard and Canon face which type of pricing situation?

A) captive-product pricing
B) optional market pricing
C) penetration pricing
D) by-product pricing
E) price bundling