A reference price might be considered deceptive if:

• A. it reflects the historical price at which the product was commonly sold
• B. it is based on the average market price of similar products
• C. it is artificially inflated to make the current price appear as a bargain
• D. it is set by government regulation

Answer: (C)

Verified step by step guidance

1. Understand the concept of a reference price: it is the price against which consumers compare the current price of a product to judge whether it is a good deal or not.
2. Recognize that a reference price can be based on various factors such as historical prices, average market prices, or regulatory prices, which are generally considered legitimate benchmarks.
3. Identify what makes a reference price deceptive: it occurs when the reference price is manipulated or artificially set to mislead consumers about the true value or discount of the product.
4. Analyze the option stating that the reference price is artificially inflated to make the current price appear as a bargain, which means the reference price does not reflect a genuine market or historical price but is set higher to create a false impression of savings.
5. Conclude that the deceptive nature of a reference price lies in its artificial inflation, which misleads consumers, unlike prices based on historical data, market averages, or government regulations.