If you see a price that is a little less than a round number, e.g. $1.99 or €99.95, does it makes you think of the lower number, e.g. $1 instead of nearly $2, and encourage you to buy the product? If not, why do you think most retailers use 'psychological pricing' or 'odd prices' like this?

If you see a price that is a little less than a round number, e.g. $1.99 or €99.95, does it makes you think of the lower number, e.g. $1 instead of nearly $2, and encourage you to buy the product? If not, why do you think most retailers use 'psychological pricing' or 'odd prices' like this?

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter11: Strategic Cost Management

Section: Chapter Questions

Problem 13DQ

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If you see a price that is a little less than a round number, e.g. $1.99 or €99.95, does it makes you think of the lower number, e.g. $1 instead of nearly $2, and encourage you to buy the product? If not, why do you think most retailers use 'psychological pricing' or 'odd prices' like this?

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