Final answer:
Sandwiching the price between the value propositions of a product can lead to an increase in its perceived value, as buyers tend to equate a higher price with better quality. However, this effect is limited by market corrections and increased consumer knowledge over time. Option A is correct.
Step-by-step explanation:
Sandwiching the price between the perceived and actual value of a product often has an impact on a customer's perception of that product. This is because when confronted with imperfect information, a buyer may equate a higher price with a higher quality, even if they are not an expert on the item's value.
For example, someone might think that a more expensive restaurant has better food, or a more costly lawyer provides better legal services. This belief, however, will reach natural limits as the market corrects and consumers become more informed.
With this in mind, if the price of a product is carefully sandwiched between its value propositions, it can A) Increase the perceived value of the product. This approach suggests that the product is worth the price tag and can lead to buyers associating the price with quality, even without complete knowledge of the product's intricacies. However, this strategy must be used judiciously as, over time, guests will access more information and the real value will become apparent.