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14 December, 13:22

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.

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  1. 14 December, 13:28
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    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.
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