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The answer to your question cannot be given without knowing what you're selling. Prices of commodities (like gasoline or flour) have an inverse relationship to demand...as price goes up, less is demanded. When there are several options or substitutes available, a consumer will select the lowest price option.

Pricing is not usually just a simple function of optimizing supply and demand, however. It is sometimes true that lowering the price of a good will increase the quantity demanded, and vice versa. But it is also true that raising the price of a good can also sometimes cause an increase in demand for that good. There are two examples of this: 1) a luxury (like a Rolex or a Yacht) and 2) a "Giffen" good (a paradox in which demand for a non-luxury good rises in tandem with its price).

The answer I want to leave you with is this: When consumers have limited means of comparing substitutes, price can serve as a leading indicator of an item's value. If something costs more, there must be a reason. And that in itself is sometimes good enough of a reason to pay more for something.

When given three options, and limited time and/or information to compare them, consumers will usually pick the middle option.

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