Gabriella Sax believes that customers in her dress shop find certain prices very appealing. Between these price levels, all prices are seen as roughly the same-and price cuts in these ranges generally do not increase the quantity sold (i.e., the demand curve tends to drop vertically within these price ranges). Therefore, Sax prices her items as close as possible to the top of each such price range. This is:

Question

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This is an example of psychological pricing, where prices are set based on the psychological impact they have on consumers, rather than solely on economics. Gabriella Sax is using price points that are perceived differently by customers, which is a common tactic in psychological pricing.

Gabriella Sax Believes That Customers in Her Dress Shop Find