Entrepreneurship - Chapter 11 Review

Building sales by charging a low initial price to keep unit costs low.

This pricing strategy requires you to consider costs and profit objectives:

Pricing based on the belief that consumers make perceptions of a product based on its price.

Price lining strategy prices items according to categories.

If a price is _____, changes in the price will prompt changes in demand.

If the demand for a product is high and the supply is low, what kind of price can you expect?

A pricing policy that allows customers to bargain for prices:

Amount or percentage by which a business lowers its original price in order to move inventory.

An inelastic product will not see many changes in demand when prices are changed..

The law of supply and demand has no impact on prices.

A markup is added to the cost of an item to ensure profit.

Discount pricing offers products at reduced prices.

Charging a high price to recover costs as quickly as possible.

Cost-based, demand-based and competition-based are the 3 main pricing strategies.

The pricing structure in the distribution channel affects a product's cost.

Higher than average prices suggest status or high quality.

The point at which a number of units sold at a price will cover the costs of production.

Offers lower prices for a limited time to increase sales.

The amount earned on one's investment in a company.

Uses odd amounts ($19.99) to suggest bargains and even amounts ($20) to suggest quality.

Costs that are subject to change depending on the quantity sold:

To increase profits from individual sales, a business owner could increase:

Determining a pricing strategy involves what?