Description: When Joe Biden took to the podium this past week for his State of the Union address, listeners could be excused for being surprised when they heard him declare war on junk fees. Biden is proposing legislation to ban those annoying fees on things like airline bookings and hotel rooms; those extra charges for things like a family assuring that all members can sit together on an airplane or hotels dropping a so-called resort fee on your bill. One problem with these junk fees is that they disguise the full or real price of the service you are purchasing. The White House argues this harms competitive markets.
Date: February 7, 2023
1) Have you or your classmates ever been hit by a junk fee? What was your reaction?
2) Does Canada have a similar junk fee problem? Have Canadian governments taken any action on this matter?
3) Illustration 9.1 of Wiley’s Managerial Accounting: Tools for Business Decision-Making provides a graphic showing a number of factors for a company to consider in establishing a price for its sales of goods and services. Which of these pricing factors do you think would come under discussion when a company adds a junk fee?