Price works because human minds assign disproportionate weight to the first information they receive when making decisions. when human see exorbitant prices first, the still high but lower prices that follow then seem like a much, much better deal.

Anchoring

Step-by-step explanation:

Price anchoring is when potential buying rely on first price information about the commodity to buy. Price anchoring is used to create a price reference point when making decision as compare to old price. It also gives customers perception of future price.