In his book, Why Most Things Fail, Paul Ormerod mentions the theoretical problems which stem from the fact that supply & demand curves are not, strictly, continuous in the mathematical sense
When was the last time you paid £∏ for something?
Less esoterically, & empirically, there is the everyday phenomenon of price points, & the strange fascination with the number 99
So when the government suddenly reduced VAT they played havoc with all this carefully calibrated point-of-sale psychology
Perhaps that is why the VAT reduction is not, some say, working as well as the government had hoped
