Price chap55 Flashcards
1
Q
Factors affecting price…
A
- objectives of a business
- consumers income, taste…
- level of demand in market
- type of market the business is in
- nature of the product
2
Q
Price elasticity…
A
measures the response of demand to a change in price
3
Q
Inelastic vs elastic…
A
inelastic demand does NOT change with price, whereas elastic demand does.
4
Q
What does cross elasticity of demand show?
A
it shows how a change in the price of one good will affect the demand for another
5
Q
Examples of pricing strategies…
A
- competition based pricing
- penetration
- premium pricing
- psychological pricing
- promotional pricing
