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3A

Category: Literary Analysis Essay

Subcategory: Economics

Level: College

Pages: 1

Words: 275

3A Economics Discussion
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Sellers can opt to raise commodity prices and reduce their sales volume, but earn more revenue on each commodity. Alternatively, they can lower the price, increase their sales volume but generate less revenue on each commodity sold. Businesses have to make wise pricing decisions for maximized pricing. Different methodologies can be used to determine the best decisions to make. These include:
Psychology Pricing
When the economy keeps fluctuating, the major concern becomes the prices of commodities (Woodruff, 2018). As time passes, information about price increase spreads rapidly and therefore more customers react to the change.
Customers’ response to commodity prices is by looking for the best alternative (Froeb, 2016). Regardless of how little the increase is, customers focus on the lower price. For instance, when a bank in Evanston Indiana raised the ATM transaction fees from $1.5 to $2.0, customers avoided the higher priced ATMs after realizing the increase in the fees.
Economy Pricing
This methodology is common in businesses such as discount retailers and food suppliers. Economic pricing attracts more customers by selling their products at a reduced price (Robb, 2017). This helps them to attract more customers to their shops.
For instance, the MidSouth lowered the three liter Coke price to 1.5 dollars. Even if the price was too low, the managers of the store wanted to use the Coke as a way to attract c…

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