Why Do Supermarkets Do This?

Question

Why when you buy something at the store or at a market the price would usually be 99 Cents or 1.98? Why don't they just round it up to 1 dollar?

Answer 1

Psychologically, most people react differently to $0.99 than they do to $1.  It's *under* a dollar, rather than a dollar.  Same thing with $19.99 -- it's *under* $20.00.

Answer 2

Because psychologically 99 cents sounds cheaper than a $1.00

and also $1.98 sounds cheaper than $2.00.

Answer 3

Marketing people have everything figured out to a science.

It even works when selling a home - $369,450 looks like a whole lot less than $370,000.