Pricing Test Prep

NEW electronic and technology related products commonly use this pricing technique.

This strategy suggests a bargain to consumers and encourage them to purchase a larger quantity.

True/False: If supply is high and demand is low, we have a shortage.

When sellers price products they include MARKUP. What does MARKUP cover?

Elastic or Inelastic....Dinner at the Cheesecake Factory.

True/False: Value is a personal choice.

Employee salaries, utilities, rent, and advertising are examples of _____.

True/False: A formula for determining selling price is COST + MARKUP = RETAIL SELLING PRICE.

True/False: When there is a shortage, price will typically be high.

The quantity a seller will make available at a given price.

This pricing strategy uses temporary discounts such as "back to school sales."

True/False: When price is high, consumers will typically buy less.

When changes in price greatly affect quantity demanded, we have ____ demand.

The amount consumers are willing and able to buy at a given price.

When changes in price have little affect on quantity demanded, we have _____ demand.

Inelastic or Elastic: Migraine medication for someone with chronic migraines?  

Setting prices very low for new products to attract customers away from the competition.

The best strategy to use when there is a lot of competition is to price your product either:

Situation that exists when supply is high and demand is low.

A term used to describe how consumer demand changes in response to changes in price.

True/False: Cost and Expense are the same thing.

Situation that exists when demand is high and supply is low

This strategy explains why stores price products at $1.99 or $9.99 instead of $2.00 or $10.00.

Inelastic or Elastic: The price of ranch increases by over $1.00, but other options are available.

The point where supply and demand meet is called the......

True/False: A consumer is most likely to buy a product if price is low and value is low.

True/False: If supply is low and demand is high, we have a surplus.

This technique involves setting higher than average prices to suggest status. 

This strategy allows the seller to make a lot of profit when the item is first introduced, but encourages competition.

Setting prices high at first to take advantage of trendsetter's high demand for a NEW product.