Question: One oddity often observed in the market is that stores charge prices ending in 99 (so we see prices of $1.99, $5.99, and so forth).
One oddity often observed in the market is that stores charge prices ending in 99 (so we see prices of $1.99, $5.99, and so forth). Explain why this sort of pricing might be puzzling to economists. Some have suggested that this is due to stores trying to exploit a cognitive limitation of shoppers. What sort of cognitive limitation might this be? Would you expect market forces to prevent firms from exploiting consumers in this or other ways?
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