A common marketing tactic among many liquor stores is to offer their clientele quantity (or volume) discounts. For instance, the
A common marketing tactic among many liquor stores is to offer their clientele quantity (or volume) discounts. For instance, the second-leading brand of wine exported from Chile sells in the United States for $8 per bottle if the consumer purchases up to eight bottles. The price of each additional bottle is only $4. If a consumer has $100 to divide between purchasing this brand of wine and other goods, graphically illustrate how this marketing tactic affects the consumer’s budget set if the price of other goods is $1. Will a consumer ever purchase exactly eight bottles of wine? Explain.
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