Final answer:
Promotional pricing is the type of pricing used when a company temporarily lowers the price of its product to create buying excitement and urgency.
Step-by-step explanation:
Promotional pricing is the type of pricing being used when a company temporarily prices its product below the list price or even below cost to create buying excitement and urgency. This strategy is often used to attract new customers or increase sales volume.
For example, during a holiday sale, a clothing store may offer a limited-time discount on certain items to generate excitement among shoppers and encourage them to make a purchase.
Promotional pricing is a common tactic used by businesses to boost sales and create a sense of urgency among consumers.