Question

Why do you think people might be more willing to pay Determine 50 percent more for a product that increases in price from 50 cents to 75 cents than a product that increases from $5.00 to $7.50, also an increase of 50 percent?

Answer 1

I think more people will be willing to pay for a product that increases by .25 cents even as a small amount over $5 to $7.50 because it is still a small amount in comparison. Although in relateion to the changes, 25 cents with an amount so small is similar to $2.50 on a larger dollar amount, they are stillseeing a larger dollar amount increase.