Julia, owner of Julia's Craft Supply Store would like to take advantage of the fact that customers are not completely rational when making buying decisions and may prefer prices that are not stated in even dollar amounts. Which pricing tactic is she interested in?
A) Discounting
B) Price skimming
C) Psychological pricing
D) Skewed pricing
E) Price lining

Question

Quizplus · Accepted Answer

Julia is interested in psychological pricing, which is the practice of setting prices that have a greater psychological impact on consumers. This often involves pricing products just below an even dollar amount or using "charm pricing" (i.e. pricing a product ending in .99 instead of rounding up to the nearest dollar). The goal is to make consumers perceive the price as lower than it actually is and to encourage them to purchase the product.

Julia, Owner of Julia's Craft Supply Store Would Like to Take