To maximize profits, businesses in imperfectly competitive markets (i.e., markets where the businesses face downward sloping demand curves) need consider their customers' willingness to pay. This was the point of our review of monopoly pricing and price discrimination strategies. Beyond monopoly pricing based on the rough shape of demand curves, there are also some more detailedpsychological pricing tweaksLinks to an external site.Links to an external site.that firms can apply to help maximize their profits. For example, to the extent that consumers arenot paying close attention to pricesLinks to an external site.Links to an external site., sometimes businesses can take advantage of that fact. For example, in markets where a business sells two differentcomplementary goodsLinks to an external site.Links to an external site., the business may price the two goods strategically to divert the consumers attention away from the full combined price. For example, sometimes cell phone service providers may give a customer a deal on a phone, but then overcharge for the phone service. Similarly, when it comes to computer printers, in some cases printers are sold at prices that are well below manufacturing costs based on the idea that the difference will be made up by high mark-ups on the sale of printer cartridges, etc. In a different context, in some cases when the cost of materials and processes rises, the producers may shrink the amount provided in a standard package (this is known as shrinkflationLinks to an external site.).

In this context, your task is to under what circumstances you believe businesses are most likely to be successful in using strategies that divert the consumers' attention away from the real price that the consumer is being charged.