How Sellers Work Out Customers' Willingness to Pay

The process can be elaborate and is often influenced heavily by consumer psychology — here's a primer.

For every business, deciding what a product’s or service’s price should be is a difficult but essential proposition. First, the costs of production have to be considered and covered. A reasonable profit level has to be accounted for. But most important of all, the product’s value to the buyer must be entered into the price calculation. The level of the …