Final answer:
The pricing tactic being described is known as price as a signal of quality. By charging higher prices than their competitors, businesses aim to give the impression that their services are higher quality and intended for an exclusive, high-end crowd.
Step-by-step explanation:
The pricing tactic being described in this question is known as price as a signal of quality. When businesses charge higher prices than their competitors, it can give the impression that their services are of higher quality and intended for an exclusive, high-end crowd.
This strategy relies on the consumer's assumption that higher prices indicate higher quality. Examples of this can be seen in expensive restaurants, where people assume the food is good because it is expensive, or in the case of hiring a lawyer, where a higher-priced lawyer is assumed to be better.
By using this pricing tactic, businesses aim to differentiate their product or service and attract customers who associate a higher price with higher quality.