pricing concepts

Question 1

Robinson Patman Act

Answer 1

Federal Legislation prohibits price discrimination not based on a cost differential. Prohibits selling at unreasonably low prices to eliminate competition. Amended by clayton act.

Question 2

profit maximization

Answer 2

point at which the additional revenue gained by increasing the price of a product equals the increase in total costs.

Question 3

pure competition

Answer 3

homogenous products in which there are so many buyers and sellers that none have significance on price.

Question 4

monopolistic competition

Answer 4

heterogeneous product different among competing suppliers. Allows the marketer a degree of control over prices.

Question 5

oligopoly

Answer 5

few sellers compete. High start up costs form barriers to keep away new competition.

Question 6

monopoly

Answer 6

single seller dominates trades in a good or service for which there is no close substitute.

Question 7

Elasticity

Answer 7

measure of responsiveness of purchasers and suppliers to a change in a price.