Which of the following pricing approaches should be used by a profit-oriented retailer if its demand curve is down-sloping to the right for a while-but then actually bends back to the left at lower prices?
A) Psychological pricing
B) Prestige pricing
C) Average-cost pricing
D) Bait pricing
E) Penetration pricing

Question

Quizplus · Accepted Answer

Prestige pricing is appropriate for a profit-oriented retailer facing a demand curve that initially slopes downward to the right but then bends back to the left at lower prices. This phenomenon indicates that at lower prices, the perceived value and thus the demand for the product decreases, which is a scenario where prestige pricing can be effective. Prestige pricing involves setting a high price to signal high quality or exclusivity, appealing to consumers who associate higher prices with higher value, which aligns with the demand curve described.

Which of the Following Pricing Approaches Should Be Used by a Profit-Oriented