You are working for a firm that produces a vacuum cleaner robot. Beside your model there is only one other competing robot in the relevant market segment. In comparison to the main competitor, your...

You are working for a firm that produces a vacuum cleaner robot. Beside your model there is only one other competing robot in the relevant market segment. In comparison to the main competitor, your robot is cheaper but also of inferior quality.

Discuss verbally and by using suitable graphs (including indifference curves of a representative consumer), how you could use the menu dependence and decoy effect of your consumers to increase the profit of the firm, for instance by increasing the number of units sold of your robot. Find a real-world example where consumer behaviour is not consistent with standard Rational Choice Theory but it is influenced by the concept of decoy effect.