Dom Lucian makes decorated lamp shades, which he has tried to sell in a variety of locations. He was initially concerned that the lamp shades should not be priced too high because he wanted to have as many people as possible have the ability to buy and enjoy one of his creative lamp shades. When he decided to increase his price by 60 percent so he could pay his own living expenses, demand for his lamp shades increased drastically. Lucian learned that people are not interested in buying designer items unless the price is high enough to indicate quality or rarity. Lucian had ignored the issue of _____ when setting his initial price.

Question

Quizplus · Accepted Answer

Lucian ignored the "expected price," which refers to the price consumers anticipate for a product based on its perceived quality or rarity. By initially setting a low price, he did not meet consumer expectations for a designer item, which changed when he increased the price.

Dom Lucian Makes Decorated Lamp Shades, Which He Has Tried