Is there a term for the price point in a line of products which you stop getting your money's worth?

In general, when you line up a group of consumer products (bicycles, baby strollers, kitchen stoves, whatever) from least expensive to most expensive, you get what you pay for as you move up in price. However, there seems to be a price point in which you start to get limited increased functionality once you get past it, when the differences or alleged improvements don’t seem to be worth the price you are paying. Is there a term for this price point (or does it only exist in my mind!)?

Diminishing return?

It sounds like you are thinking of Premium Pricing, though this refers to the strategy rather than the point itself.

Well, the precise location of that point for you is definitely only in your mind–other people could pick different points for them. I can’t think of a precise economic term for that point.

Sweet spot?

Yes, there is something called “the law of diminishing returns” which us exactly about what the OP is talking about. But I don’t think it’s possible to objectively choose a point along the price line. Some feature or function that is very pricey will absolutely be worthwhile to someone with unusual circumstances, but not worthwhile to another.

maximized utility

You continue paying more for the product until the utility of the additional money you pay exceeds the utility of the additional functionality you get. Or, you decrease the price you pay until the utility you lose in reduced functionality exceeds the utility of the money you save. Same point, it’s where your money/product utility is maximized.

I agree with “diminishing returns” used to denote the lesser and lesser utility of each additional dollar. But I’d like to point out that “price” and “price point” are two different things. You just want a price, not a price point.

I was going to say “point of diminishing return” but I think I like Cheesesteak’s “maximized utility” better.


For me, personally, I tend to weigh my purchase price verses quality quite carefully. I shop discount stores, Kijiji, garage sales and such. I rarely buy just because of a manufacturer, designer or “label” … I do my research on major perchases.

Example, bought tires on Monday. Installed balanced, good brand name, great specs - $990. I shopped by specs, warrenty, customer reviews of both product and provider (which tire shop).

I litterally could have gone with $89 el cheapo tires, used or retreaded tires, so my price quality “lower cut off” was higher than that, on the other hand, high performance racing tires weould have been a silly choice for a family sedan, on the “third hand” it is a very fuel efficient camry hybrid, so giving it tires that don’t work against it was important too. Midrange price point seemed a good choice here.

I did not go with the cheapest store, as my internet research showed they had quite a few complaints on after service/honouring warrenty and high pressure sales. Oddly enough the highest priced store had the same issues, plus complaints of women getting higher quotes on the same products. (I am a man, btw)

Price range on same spec tires was $775 - $1360 over 5 providers.

All things considered, I guess the term you may be looking for is “Value for Dollar”, as the price of the object is often unrelated to the money invested/spent.

Best value?

I tend to think of this as when the marginal utility goes to zero, though maximum utility is more succinct.