Odd-even pricing involves
A) setting a limited number of prices for certain categories of products.
B) setting an initial high price to cover new product costs and generating a profit.
C) taking advantage of the fact that consumers do not always respond rationally to stated prices.
D) setting prices in uneven dollar amounts.
E) setting an initial low price to establish a new product in the market.

Question

Quizplus · Accepted Answer

Odd-even pricing involves setting prices in uneven dollar amounts, such as $9.99 instead of $10. This is done to create the perception of a lower price in the minds of consumers, even if the difference is only one cent. Research has shown that many consumers tend to round down prices, which means they perceive a $9.99 product as being in the $9 range, rather than the $10 range. This can help to increase sales and make the product seem more affordable.

Odd-Even Pricing Involves