Last year Fiona had a yard sale. She marked the prices of items very reasonably, and she refused to reduce them when people tried to negotiate. This year she had another yard sale, but this time she marked the prices of items quite high, and then reduced them by 50 percent or more when people asked to negotiate. Fiona was surprised to find that she made much more money this year. Which of the following may have led people to purchase a lot from Fiona's sale this year?

Question

Quizplus · Accepted Answer

This is an example of contrast effects, where the higher initial price makes the reduced price seem like a better deal in comparison. Customers may have been more willing to purchase items at a higher price if they felt like they were getting a significant discount.

Last Year Fiona Had a Yard Sale