When a firm charges $4.95 instead of $5.00, what do economists call this pricing strategy?
A)cost-plus pricing
B)indirect pricing
C)odd pricing
D)unusual pricing

Question

Quizplus · Accepted Answer

This is known as odd pricing, which is a strategy of setting prices that are slightly below a round number (e.g., $4.95 instead of $5.00). This is done to make prices seem more attractive to consumers and to suggest that the price was calculated with careful consideration.

When a Firm Charges $4