Setting prices is a critical decision in implementing a retail strategy because price is a critical component in customers' perceived value. In setting prices, retailers consider the price sensitivity of customers in their target market, the cost of merchandise and services offered, competitive prices, and ethical restrictions.

Retailers need to consider legal and ethical issues when setting pricing. Some of the legal and ethical pricing issues are predatory pricing, resale price maintenance, horizontal price fixing, bait$-$and$-$switch tactics, scanned versus posted prices, and deceptive reference prices.

Match each pricing issue with its corresponding definition and example.

Scanned versus posted price

$5$

Deceptive Reference Prices

$2$

Geofencing

$3$

Bait and Switch

Horizontal Price Fixing

Match each of the options above to the items below.

A method for establishing merchandise prices for the purpose of driving competition from the marketplace $($Example: A local coffee shop opened up across the street from a national chain and the national chain radically lowered their prices.$)$

Involves agreements between retailers that are in direct competition with each other to set the same prices $($Example: Two major department stores decide to sell name$-$brand luggage at a discounted price to discourage competition from a