The manager of a local convenience store is expanding his line of small toy items. To price these new items, the manager is looking at the prices being charged by competing retailers in his area. For the popular “Titan Joe Action Figure,” he has observed the following prices:
Downtown department store:……………………$14.00
Chain drug store: ………………………………..$11.99
Well-known local variety store………………….$10.99
Large discount department store:………………...$ 9.97
Discount toy store………………………………..$ 9.55
If the manager is inclined to use parity pricing, what price should he set for the Titan Joe Action Figure? Explain your reasoning.