A shop prices a product at Rs. 999 instead of Rs. 1,000 to make the price appear lower. Which pricing practice is this?
Correct answer: C. Psychological pricing
- A. Predatory pricing
- B. Transfer pricing
- C. Psychological pricing
- D. Geographical pricing
Explanation
Psychological pricing uses price presentations that influence how customers perceive value, such as Rs. 999 rather than Rs. 1,000. Transfer pricing concerns transactions between related units, while predatory pricing involves deliberately undercutting rivals.
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