A firm is using Blank______ pricing when it prices its software at $499, hoping that consumers perceive the price as "something more than $400" rather than "about $500."

Question

Multiple choice question.

penetration

loss leader

odd-even

customary

Answer 1

The correct answer is odd-even pricing. This pricing strategy sets prices at an odd number (in this case, $499) to make the price appear lower and to encourage consumers to perceive it as being below a certain threshold (in this case, "more than $400" rather than "about $500").