Psychological Pricing Involves Setting an Initial Low Price to Establish a New Product

question 24

Short Answer

Psychological pricing involves
setting an initial low price to establish a new product in the market.
setting prices in uneven dollar amounts.
setting a limited number of prices for certain categories of products.
setting an initial high price to cover new product costs and generating a profit.
taking advantage of the fact that consumers do not always respond rationally to stated prices.

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Definitions:

P-value

A measure in statistical hypothesis testing that helps in determining the significance of results, indicating the probability of observing the data if the null hypothesis is true.

Simple Random Sample

A sample drawn in such a way that every member of the population has an equal chance of being selected.

Degrees Of Freedom

The number of independent values or quantities which can be assigned to a statistical distribution, often related to the number of values in the final calculation of a statistic that are free to vary.

One-sample T Test

A statistical test used to compare the mean of a sample to a known value or theoretical expectation when the population variance is unknown.