Q17 - Certain items-those with

[tzyc]

I'm not sure what this question's type would be...infer maybe? But then not sure how (A) would be inferred from the stimulus...
Isn't the counterproductive feature of setting too low price "calling into question the very thing-exclusivity"? So it does not lack it I thought...
I originally chose (D) because it seemed they only rely on seller's estimates of value instead on buyer's...

[rinagoldfield]

This is a procedure question. We’re looking to identify the reasoning that underlies the recommended pricing strategy.

So what is that pricing strategy? The stimulus recommends that sellers aim too high when setting the initial price of an exclusive product. Aiming too low would tarnish the product’s exclusive appeal, and therefore lower the product’s value in the eyes of customers.

In practice, this means that Christian Dior should price new scarves at $500 rather than $20. Customers may not want to plunk down $500 for a scarf, but they will desire the the scarf because its price makes it appear exclusive. The $20 scarf, on the other hand, seems common. Customers who buy Dior for its high-class brand won’t want the $20 scarf.

Essentially, the stimulus recommends aiming high because the alternative (aiming low) has negative consequences.

(A) matches this idea.

But then not sure how (A) would be inferred from the stimulus...
Isn't the counterproductive feature of setting too low price "calling into question the very thing-exclusivity"? So it does not lack it I thought...

Exactly! You have perfectly articulated the "counterproductive feature" of setting the price too low. But aiming low is the rejected alternative to the recommended strategy of aiming high. Aiming high lacks this counterproductive feature.

(B) talks about "advantages of the rejected alternative." But no advantages of aiming low were ever outlined.
(C) is out of scope and unsupported. No "experience" is discussed, and analysis is indeed offered in support of aiming high.
(D) is contradicted. The strategy of aiming high relies heavily on prospective buyers’ estimates of value. The seller is able to set a high price because the buyer believes the product to be exclusive, i.e. valuable.
(E) is unsupported. Dior doesn’t price scarves at $500 because no one will notice that the scarves are overpriced.

Hope this helps!

[economienda]

The conclusion seemed like it rejected setting the price on items too high when I first read it.

But it actually says: "If there is an error in pricing, it should be one where you set the price of an item too high than setting the price too low because the latter will lead to people not buying that item whereas the former may not."

[sweetsecret]

This is a principle question. We’re looking to identify the reasoning that underlies the recommended pricing strategy.

So what is that pricing strategy? The stimulus recommends that sellers aim too high when setting the initial price of an exclusive product. Aiming too low would tarnish the product’s exclusive appeal, and therefore lower the product’s value in the eyes of customers.

In practice, this means that Christian Dior should price new scarves at $500 rather than $20. Customers may not want to plunk down $500 for a scarf, but they will desire the the scarf because its price makes it appear exclusive. The $20 scarf, on the other hand, seems common. Customers who buy Dior for its high-class brand won’t want the $20 scarf.

Essentially, the stimulus recommends aiming high because the alternative (aiming low) has negative consequences.

(A) matches this idea.

Exactly! You have perfectly articulated the "counterproductive feature" of setting the price too low. But aiming low is the rejected alternative to the recommended strategy of aiming high. Aiming high lacks this counterproductive feature.

(B) talks about "advantages of the rejected alternative." But no advantages of aiming low were ever outlined.
(C) is out of scope and unsupported. No "experience" is discussed, and analysis is indeed offered in support of aiming high.
(D) is contradicted. The strategy of aiming high relies heavily on prospective buyers’ estimates of value. The seller is able to set a high price because the buyer believes the product to be exclusive, i.e. valuable.
(E) is unsupported. Dior doesn’t price scarves at $500 because no one will notice that the scarves are overpriced.

Hope this helps!

I liked all of your reasoning except for E. Do you have another way of explaining it? What you wrote is the same as "Dior prices scarves at $500 because people will notice the scarves are overpriced," correct? If true, couldn't you take it a step further and say that well then it shows exclusivity? How would you eliminate this answer choice then?

[estellaW580]

This is a principle question. We’re looking to identify the reasoning that underlies the recommended pricing strategy.

So what is that pricing strategy? The stimulus recommends that sellers aim too high when setting the initial price of an exclusive product. Aiming too low would tarnish the product’s exclusive appeal, and therefore lower the product’s value in the eyes of customers.

In practice, this means that Christian Dior should price new scarves at $500 rather than $20. Customers may not want to plunk down $500 for a scarf, but they will desire the the scarf because its price makes it appear exclusive. The $20 scarf, on the other hand, seems common. Customers who buy Dior for its high-class brand won’t want the $20 scarf.

Essentially, the stimulus recommends aiming high because the alternative (aiming low) has negative consequences.

(A) matches this idea.

Exactly! You have perfectly articulated the "counterproductive feature" of setting the price too low. But aiming low is the rejected alternative to the recommended strategy of aiming high. Aiming high lacks this counterproductive feature.

(B) talks about "advantages of the rejected alternative." But no advantages of aiming low were ever outlined.
(C) is out of scope and unsupported. No "experience" is discussed, and analysis is indeed offered in support of aiming high.
(D) is contradicted. The strategy of aiming high relies heavily on prospective buyers’ estimates of value. The seller is able to set a high price because the buyer believes the product to be exclusive, i.e. valuable.
(E) is unsupported. Dior doesn’t price scarves at $500 because no one will notice that the scarves are overpriced.

Hope this helps!

I liked all of your reasoning except for E. Do you have another way of explaining it? What you wrote is the same as "Dior prices scarves at $500 because people will notice the scarves are overpriced," correct? If true, couldn't you take it a step further and say that well then it shows exclusivity? How would you eliminate this answer choice then?

first of all going unnoticed is not the point of the argument, nor is it mentioned anywhere, with a principle questions, the answers need to past a descriptive test, which is it follows exactly what the stimulus says, no new infos allowed. Second of all, it says, the error with this strategy UNLIKE the other, is likely to go unnoticed..... basically saying, the other more likely to go noticed than this one. BUT NOWHERE is that implied or true. ALL it says, is that asking a price too low is a SERIOUS error, makes people question the very exclusivity of the item. This serious error is not noticing or not noticing. the other strategy however will not commit such serious error..... maybe another error .... but not said serious error. that is what the argument is about.

[Amy K994]

Is there anyone who can tell me which statement is the conclusion?