Factors influencing the price Flashcards
1
Q
Costs
A
Price must cover the cots
fixed costs - stays the same
variable costs - depends on usage of product
2
Q
demand
A
what people are willing and able to pay for product
if demand is low business will have to lower prices
3
Q
nature of the market
A
if there are many firms in market pricing must be competitive
4
Q
Business’ objective and approach
A
using different kinds of pricing to reach different goals
for example using penetration pricing to increase the share of the product
5
Q
position in the product life cycle
A
price that is charged may vary depending on where the product is in its life cycle
