Quills, Inc., is a manufacturer of ballpoint pens, pencils, and stationery. The firm's primary distribution strategy is to sell in large volumes to office supply stores and large discount chains. Charles Powell, CEO of Quills, had hoped to manufacture and sell in large enough quantities that prices could be held low. However, in the first several months, the firm experimented with the price portion of its marketing mix in an effort to cater to a number of markets.

1. Why might have Charles Powell have avoided using market-skimming pricing at Quills?

A) A high price was likely to produce more market growth.
B) It was difficult for competitors to enter the market.
C) The costs of producing a larger volume of the firm's products were too high.
D) The quality and image of the products would not have likely supported the high initial price.
E) The market for the products was not highly price sensitive.

2. By offering a set of pens packaged with stationery and matching envelopes, Quills is using ________.

A) optional product pricing
B) product bundle pricing
C) by-product pricing
D) dynamic pricing
E) price-fixing