A retailer decides to reduce the price of a sport coat that normally costs $98. The reduction in price is $3. The storeowner believes that the reduction will catch the eye of the value shopper. If the sport coat does not sell, the retailer might wish to consider which of the following before making another price change?

Question

Quizplus · Accepted Answer

Weber's Law relates to the just noticeable difference in stimuli, such as price changes, and suggests that a noticeable difference is a constant proportion of the original stimulus. In this context, it implies that for a price change to be significant and influence consumer behavior, it must be a noticeable proportion of the original price, not just a fixed amount.

A Retailer Decides to Reduce the Price of a Sport