Price psychology refers to the study of how consumers perceive prices and how these perceptions influence their purchasing decisions. It involves understanding the mental and emotional factors that affect how people view the value of a product or service. For example, pricing items just below a round number, like $9.99 instead of $10, can make a product seem more attractive. Marketers often use price psychology to create strategies that encourage sales. Techniques such as anchoring, where a higher initial price is presented alongside a discounted price, can make consumers feel they are getting a better deal. This approach can significantly impact consumer behavior and overall sales performance.