Why do you think goods are sometimes marked in prices that end in 9s, for example ―$29.99‖ instead of $30, or ―$9.99‖ instead of $10? I. Consumers respond to incentives-they view the products as cheaper and so they buy more. II. Businesses are sneaky and add the extra cent onto taxes on the product. III. It is a sales strategy that makes people think the product is on sale.

Question

Quizplus · Accepted Answer

This pricing strategy is known as "charm pricing" or "psychological pricing." Consumers often focus on the first digit in a price and see $29.99 as being closer to $29 than to $30, making it seem like a better deal. This perception can lead to increased sales, which is why businesses use it as a sales strategy. However, there is no evidence to support option II.

Why Do You Think Goods Are Sometimes Marked in Prices