Pricing Flashcards
1
Q
Totall contribution
A
= PQ –VCQ
2
Q
Total profit
A
= PQ –VCQ –TFC
3
Q
P (optimal)
A
= (Maximum Reservation Price + Variable Cost per unit) / 2
= (MRP + VC) / 2
4
Q
% Breakeven Price Change
A
=(old CM - new CM) / new CM
5
Q
CM
A
= SP - VC
6
Q
Residual E.
A
= Own E + Competitor reaction E * Cross E
7
Q
% Change in sales from Residual E
A
Own Price Change (&) * Residual E
