With prestige pricing, some of the traditional price/demand curves cannot properly predict sales or market response because it violates the common assumption that increasing price decreases volume.

Question

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Prestige pricing involves setting high prices to convey luxury or exclusivity, which can sometimes lead to an increase in demand rather than a decrease. This violates the traditional inverse relationship between price and demand, making it difficult to predict market response using standard price/demand curves.

With Prestige Pricing, Some of the Traditional Price/demand Curves Cannot