What Is Odd Pricing

question 15

Multiple Choice

What is odd pricing?

• A) setting prices based on a statistical analysis of consumer behaviour
• B) varying prices at odd intervals rather than maintaining stable and predictable pricing
• C) charging prices that fall slightly below even dollars and cents, such as charging $5.99 instead of $6.00
• D) charging prices that differ significantly from competitors' prices in order to create an image of prestige and quality

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Definitions:

Neoclassical Assumption

A perspective in economics that assumes individuals have rational preferences, markets are capable of reaching equilibrium, and information is symmetrically distributed.

System 1

A term often used in psychology and behavioral economics, referring to the brain's fast, automatic, and intuitive approach to decision-making.

Rational Behavior

Human behavior based on comparison of marginal costs and marginal benefits; behavior designed to maximize total utility.

System 2

A term often used in psychology to refer to the deliberate, effortful, and analytical mode of thinking, contrasted with fast, automatic System 1 thinking.