Quantity Surcharges on Groceries
AbstractA quantity surcharge exists when the unit cost of a given brand is higher for a large-size package than for a smaller one. This paper examines some product and household characteristics that influence observed quantity surcharging practices. Results indicate that the propensity to buy a large-size package of a product is positively influenced by the extent of a household's usage of that product, procurement cost, and carrying capacity, and is negatively influenced by the propensity to price search. A retailer's decision to levy a quantity surcharge is, in turn, influenced by the demand for the product, the propensity to buy large-size packages, and to some extent the product's carrying cost.
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Bibliographic InfoPaper provided by University of Connecticut, Food Marketing Policy Center in its series Research Reports with number 25179.
Date of creation: 1994
Date of revision:
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Agribusiness; Demand and Price Analysis;
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