question
Price
answer
The amount of money exchanged for a good or service, or the sum of all values that customers exchange for the benefits of having or using the product or service.
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Price floor
answer
A legal minimum on the price at which a good can be sold
Equal to cost
Equal to cost
question
Price ceiling
answer
A legal maximum on the price at which a good can be sold
No demand above price ceiling
If the perceived customer value increase the price can increase
No demand above price ceiling
If the perceived customer value increase the price can increase
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cost-based pricing
answer
setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk (starts with the product)
-cost-plus (markup) pricing
-breakeven
-cost-plus (markup) pricing
-breakeven
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markup pricing
answer
1- cost per unit
Unit cost= variable cost + fixed cost/ expected unit of sales
2- Selling price
Selling price=unit cost/(1-Markeup)
Unit cost= variable cost + fixed cost/ expected unit of sales
2- Selling price
Selling price=unit cost/(1-Markeup)
question
breakeven pricing
answer
Revenues=Cost
(Quantity x selling price) = fixed cost + (Quantity x variable cost)
(Quantity x selling price) = fixed cost + (Quantity x variable cost)
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contribution margin per unit
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Selling price - variable cost per unit
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Customer value-based pricing
answer
setting price based on buyers' perceptions of value rather than on the seller's cost.
-good value
-value added
-good value
-value added
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Good-value pricing
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offering just the right combination of quality and good service at a fair price
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Value-added pricing
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attaching value-added features and services to differentiate a company's offers and charging higher prices
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competition-based pricing
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setting prices based on competitors' strategies, prices, costs, and market offerings
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Price sensitivity factors
answer
Internal: the company's marketing strategy and organization
External: market/ economic conditions and
Demand elasticity
External: market/ economic conditions and
Demand elasticity
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