Psychological pricing is a marketing strategy that involves setting prices just below a round number to make the price appear more attractive to consumers. This tactic can create the perception of a bargain, even if the difference in price is minimal. For example, [tex]$39.99 is often perceived as significantly cheaper than $[/tex]40.00, even though the actual difference is just one cent.
To determine the answer, let's analyze each option:
A. [tex]$39.99 - This price is just one cent below $[/tex]40.00. It fits the definition of psychological pricing, as it makes the price appear less than a round number like [tex]$40.00.
B. $[/tex]400.00 - This is a round number. It does not fit the definition of psychological pricing because it does not create the perception of a bargain through pricing just below a round number.
C. [tex]$3,000 - This is also a round number. Similar to $[/tex]400.00, it does not utilize psychological pricing tactics.
D. [tex]$701.00 - Although this is not a round number, it is not strategically set just below a significant round figure. Therefore, it does not fit the psychological pricing strategy.
Based on this analysis, the correct example of psychological pricing is:
A. $[/tex]39.99
