Question

A supermarket sells kiwis at a price of 33 cents each. Then it starts selling the same product at the price of 3 kiwis for 99 cents. The manager observes that the sales are higher under the new policy. This behavior is best described as (A) mental accounting; (B) satisficing; (C) anchoring; (D) a context effect.

Answer 1

Answer:

C. Anchoring

Explanation:

The first price to be mentioned will have an effect on the perception of all future prices. If we start with $200, then $100 will seem cheap, but £1000 seem expensive. But if we start with $10, then $100 will seem expensive.

The anchor for a price perception may be found in the first price mentioned. It can also arrive in the mind of the purchaser, where the anchor may have been set by previous experience.