Psychological pricing involves
A) setting an initial low price to establish a new product in the market.
B) setting prices in uneven dollar amounts.
C) setting a limited number of prices for certain categories of products.
D) setting an initial high price to cover new product costs and generating a profit.
E) taking advantage of the fact that consumers do not always respond rationally to stated prices.

Question

Quizplus · Accepted Answer

Psychological pricing takes advantage of the fact that consumers do not always respond rationally to stated prices. It involves setting prices in a way that influences consumers' perceived value of the product, such as using odd or rounded numbers, or pricing products slightly below a whole number (e.g. $4.99 instead of $5.00). This can make the price seem more affordable and appealing to consumers.

Psychological Pricing Involves