When a cell phone company sells a smartphone that only works on its cellular network, this is called:
perfect price discrimination.
arbitrage.
tying.
bundling.
When a cell phone company sells a smartphone that only works on its cellular network, this is called tying. Tying occurs when a company sells a product (in this case, the smartphone) that can only be used with a specific service (the cellular network), effectively "tying" the sale of one product to the use of another.