Some Retailers Commonly Use Prices That End in Certain Numbers

question 91

Multiple Choice

Some retailers commonly use prices that end in certain numbers. They seem to assume that their customers see prices with these numbers as substantially lower. This is:

• A) odd-even pricing.
• B) demand-backward pricing.
• C) leader pricing.
• D) prestige pricing.
• E) psychological pricing.

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Definitions:

Bias

A tendency to lean in a certain direction, either in favor of or against a particular thing, person, or group compared with another, often in a way considered to be unfair.

Journalizing

The process of recording a transaction entry into the journal.

Business Transactions

Financial activities or exchanges involving the transfer of value between entities or parties, affecting the financial position of a business.

Journal

A listing of business transactions in chronological order. The journal links on one page the debit and credit parts of transactions. Alternatively known as general journal.