KNOWLEDGE BASE:

If you have ever grumbled while you paid $4 for a bottle of water at the airport or $8 for a hotdog at a sporting event you have seen this

If your competitor sells their product for $100 each and your product is 85% as good as theirs, there is an argument for you charging $85

This is a good place to start to make sure you don't lose money on a sale but there are other, and better, ways to price as well.