In his book Predictably Irrational, author Dan Ariely shows this ad as an example of price relativity:
It seems to make no sense that both the print subscription AND the print and web subscription are both at $125. Dan Ariely explains that "most people don't know what they want unless they see it in context."
We don't know whether the web subscription for $59 or the print subscription for $125 are good or bad value, but we know for sure that both print and web subscription for $125 is better than the print only for the same price.
Now the goal is to turn that relativity to our advantage. If you give somebody one price for one service, it will be harder for them to know if it's a good deal or not.
For example, let's say that you're playing a private party. You know that you want $100 per hour per person. Here is how you can put it in context to help you land the gig at that price:
$70 for a half hour
$100 for an hour
$180 for an hour, client picks the music
If you're teaching and you want to charge $40 an hour at your studio, here is what your teaching "menu" should look like:
$30 a 1/2 hour at the studio
$40 for an hour at the studio
$80 for an hour at your home
First figure out what it is you want, and then create some options around it to create relativity in order to get paid what you want while your customers are sure to be getting the best deal.