While watching television, you see an advertisement for a microwave pasta cooker. You're interested but are sure it is going to be too expensive, and you wouldn't pay over $20 for it. To your surprise, the pasta cooker is being offered for the low price of $19.99. This is an example of what type of pricing strategy?
A) product-line pricing
B) new-product pricing
C) psychological pricing
D) promotional pricing

Question

Quizplus · Accepted Answer

This is an example of psychological pricing, as the price of $19.99 is just below the psychological threshold of $20, making it seem like a better deal to consumers.

While Watching Television, You See an Advertisement for a Microwave