Entrepreneurship - Chapter 11 Review

Higher than average prices suggest status or high quality.

A pricing policy that allows customers to bargain for prices:

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

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

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

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

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

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

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

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

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

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

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

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

Discount pricing offers products at reduced prices.

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

Offers lower prices for a limited time to increase sales.

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

Determining a pricing strategy involves what?

Price lining strategy prices items according to categories.

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

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

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