Which of the following is the best example of psychological pricing?

QUESTION

A) The local university charges $16,000 for one student for one year of education.
B) Howard has set the price of his luxury RV at $319,000.
C) Eugene wants $350.00 for his heavy-duty chainsaw.
D) Dominic has set the price of his specialty sandwiches at $7.50.
E) Karen is asking $5,999 for her used car.

ANSWER

Answer: E
Explanation: E) Buyers focus on the first digit of a price, so $4,999 seems far cheaper than $5,000. Also, people tend to subconsciously interpret precise numbers as being smaller than round ones.

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