Question

Some retailers feel that their potential customers find certain prices appealing, but between these prices the customers see prices as roughly the same--and thus price cuts within these ranges will not increase the quantity sold (i.e., the demand curve is vertical within these "same price" ranges). these retailers probably use ______________ if they want to maximize profit. 1. leader pricing 2. prestige pricing 3. psychological pricing 4. bait pricing 5. average-cost pricing

Answer 1

These retailers probably use PSYCHOLOGICAL PRICING if they want to maximize profits.
Psychological pricing refers to the pricing strategy that is used to attract customers to buy more and its use is based on the theory that certain prices have psychological impacts. Psychological pricing majorly use the emotional response of the consumers to increase sales.