4.5b - Price

Question 1

practice of a business setting the price of its goods or services at the same or similar level to that of its competitors

Answer 1

competitive pricing

Question 2

setting the selling price of a product higher than the direct costs of a production per unit in order to ensure there is a positive contribution made towards payment of indirect costs

Answer 2

contribution pricing

Question 3

adding a percentage or specific amount of profit to the cost per unit of output in order to determine the selling price

Answer 3

cost-plus pricing (mark-up pricing)

Question 4

practice of varying the price of a good or service to reflect changing market demand

Answer 4

dynamic pricing

Question 5

setting the price of a good/service below its costs of production. the purpose is to entice customers to buy other products in addition to the product

Answer 5

loss leader pricing

Question 6

extra amount charged by a business on top of its unit costs of production in order to earn a positive profit margin

Answer 6

mark-up

Question 7

setting low prices in order to gain entry into a new market

Answer 7

penetration pricing

Question 8

temporarily setting prices so low that competitors, especially smaller businesses, cannot compete at a profitable level

Answer 8

predatory pricing

Question 9

price of a good/service is set significantly higher, because it is higher quality or is unique

Answer 9

premium pricing

Question 10

value of a good or service, amount paid by a customer to purcahse the product

Answer 10

price

Question 11

measures the degree of responsiveness of demand for a product due to a change in the price

Answer 11

price elasticity of demand (PED)

Question 12

businesses competing by a series of continous and/or intensive price cuts to threaten rival firms

Answer 12

price wars

Question 13

various methods of setting the amount that customers pay for certain goods/services

Answer 13

pricing methods