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27 Cards in this Set
- Front
- Back
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Price
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That which is given up in an exchange to acquire a good or service.
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Revenues
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The price charge to customer multiplied by the number of units sold.
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Profit
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Revenues Minus Expenses
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Return on Investment (ROI)
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Net profit after taxes divided by total assets.
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Market Share
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A company's product sales as a percentage of total sales for the industry.
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Statue Quo Pricing
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A pricing objective that maintains existing prices or meets the competition's prices.
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Demand
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The quantity of a product that will be sold in the market at various prices for a specified period.
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Supply
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The quantity of a product that will be offered to the market by a supplier at various prices for a specified period.
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Price Equilibrium
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The price at which demand and supply are equal.
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Elasticity of Demand
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Consumers' responsiveness or sensitivity to changes in price.
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Elastic Demand
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A situation in which consumer demand is sensitive to changes in price.
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Inelastic Demand
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A situation in which consumer demnd is sensitive to changes in price.
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Unitary Elasticity
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A situation in which total revenues remains the same when prices change.
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Yield Management Systems (YMS)
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A technique for adjusting prices that uses complex mathematical software to profitably fill unused capacity by discounting early purchases, limiting early sales at these discounted prices, and overbooking capacity.
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Variable Cost
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A cost that varies with changes in the level of output.
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Fixed Cost
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A cost that does not change as output is increased or decreased.
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Average Variable Cost (AVC)
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Total variable cost divided by quantity of output.
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Average Total Cost (ATC)
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Total costs divided by quantity of output.
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Marginal Cost (MC)
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The change in total costs associated with a one-unit change in output.
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Markup Pricing
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The cost of buying the product from the producer plus amounts for profit and for expenses not otherwise accounted for.
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Keystoning
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The practice of marking up prices by 100 percent, or doubling the cost.
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Profit Maximization
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A method of setting prices that occurs when marginal revenues equals marginal cost.
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Marginal Revenue
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The extra revenues associated with selling an extra unit of output or the change in total revenues with a one-unit change in output.
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Break-Even Analysis
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A method of determining what sales volume must be reached before total revenues equals total cost.
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Selling Against the Brand
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Stocking well-known branded items at high prices in order to sell store brands at discounted prices.
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Extranet
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A private electronic network that links a company with its suppliers and customers.
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Prestige Pricing
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Charging a high price to help promote a high-quality image.
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