Doug runs a hardware store.He learned that customers process the price of $9.99 as significantly lower than the price of $10.00 because of the reduced digit count in the price point.Accordingly,he follows this rule to set up the prices for all products.Doug uses _____.

Question

Quizplus · Accepted Answer

The rationale for odd pricing is very different and it is often regarded as a key element of psychological pricing, or creating a perception about price merely from the image the numbers provide the customer. Studies indicate that at certain important price breaks-$9.99 versus $10.00, $99.95 versus $100.00, and so on-customers mentally process the price as significantly lower because of the reduced digit count in the price point.

Doug Runs a Hardware Store