Peloton Slashes Price on Exercise Bike, Predicts Slowing Growth

This article illustrates complex pricing. (WSJ, Sep, 2021) It also illustrates that firms may sacrifice profits today for greater profits tomorrow. Peloton bikes and sbscription services are complements. The Bike is a substitute for the Bike+.

Do these pricing decisions conform with the guidelines developed in ECON 610?

"The lowest-cost Peloton Bike will sell for $1,495, down from $1,895. The higher priced Bike+ still goes for $2,495. "

"In a letter to investors, executives said they were trying to add as many customers to its subscription workout classes as possible, even though the price cut, coupled with higher shipping costs, would depress near-term profits."

"The company reduced the Bike to $1,895 from $2,145 in September, when it launched the more-expensive Bike+."