Many Firms Use Odd Pricing-Charging Prices Such as

question 2

Multiple Choice

Many firms use odd pricing-charging prices such as $.99 instead of $1.00 and $9.99 instead of $10.00.One reason for this pricing strategy is that consumers will somehow believe that the difference in price appears to be greater than it actually is.Researchers conducted consumer surveys to determine whether this is actually the case.What was the result of these surveys?

• A)The surveys found that small differences in price cause small differences in quantity demanded. There is no evidence that odd pricing makes economic sense.
• B)Although the results were not conclusive, there is some evidence that odd pricing makes economic sense.
• C)The surveys found indifference regarding this strategy among most consumers, but hostility among other consumers. The latter group resented what they viewed as an attempt to fool them into buying products with odd prices. Researchers concluded that odd pricing is counterproductive.
• D)The survey results were inconclusive because most consumers gave unreliable responses to the survey questions.

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Definitions:

Believable

A characteristic attributed to leaders or sources of information that are perceived as trustworthy and credible.

Moral Dimension

Refers to the ethical aspects and considerations inherent in decision-making processes and actions.

Ethnic Groups

Categories of people who identify with each other based on common ancestral, social, cultural, or national experiences.

Developing Country

A nation with a lower level of industrialization, a lower standard of living, and a lower Human Development Index (HDI) compared to developed countries.