Odd-Even Pricing Involves

question 270

Multiple Choice

Odd-even pricing involves

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

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Definitions:

Forward Rate

A term in finance that refers to the future interest rate agreed upon in a forward contract, or the rate used to discount a future financial transaction.

Stock Market

A public market for buying and selling company stock and derivatives at an agreed price; it is a key indicator of the health of an economy.

GDP

Gross Domestic Product, the total market value of all final goods and services produced within a country in a given period, used as a broad measure of economic performance.

Risk-Free Rate

The theoretical rate of return of an investment with zero risk, often represented by the yield on government securities such as U.S. Treasury bills.