price

Question 1

pricing policies:
skimming

Answer 1

occurs when a new product is entering the market initially at high price and after a period of time reduce prices when competition enters the market and most useful when its new products, hi-tech, or little competition

Question 2

pricing policies:
penetration

Answer 2

initially the product will be realised at a low price attracting customers to the product it is then increased a customer loyalty is build. used in new businesses chocolate or magazines

Question 3

pricing penetration:
competitor-based

Answer 3

used to compete with businesses have similar priced products as competition its used when there is strong competition, hi-tech or cars etc

Question 4

demand curves

Answer 4

as price increases demand decreases
as price decreases demand increases

Question 5

factors affecting price:
competition in the market

Answer 5

set prices similar to competition encorouging customers away from other businesses

Question 6

factors affecting price:
price the market can bare

Answer 6

the price customers are willing to pay
low quality=low price etc

Question 7

factors affecting price:
quantity

Answer 7

having high levels of stock means selling at a low price stock must be sold quickly due to expiration date

Question 8

factors affecting price:
profit

Answer 8

must set a profit margin per unit in order to ensure success it encorouges investors and sales must be higher than costs

Question 9

factors affecting price:
cost of production

Answer 9

price of product must cover the cost of production so sales must be higher than costs or businesses will fall

Question 10

factors affecting price:
demand

Answer 10

refers to the quantity of product needed by customers
high demand = high prices