Term
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Definition
| A dollar amount added to the cost of products to get the selling price. |
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Definition
| The percentage of selling price that is added to the cost to get the selling price. |
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Definition
| The sequence of markups firms use at different levels in a channel-determining the price structure in the whole channel. |
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Definition
| The number of times the average inventory is sold during a year. |
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Definition
| Adding a reasonable markup to the average cost of a product. |
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Definition
| The sum of those costs that are fixed in total-no matter how much is produced. |
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Term
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Definition
| The sum of those changing expenses that are closely related to output-such as expenses for parts, wages, packaging materials, outgoing freight, and sales commissions. |
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Term
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Definition
| The sum of total fixed and total variable costs. |
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Term
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Definition
| The total cost divided by the related quantity. |
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Term
| Average Fixed Cost (Per Unit) |
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Definition
| The total fixed cost divided by the related quantity. |
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Term
| Average Variable Cost (Per Unit) |
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Definition
| The total variable cost divided by the related quantity. |
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Term
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Definition
| An approach to determine whether the firm will be able to break even-that is, cover all its costs-with a particular price. |
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Definition
| The sales quantity where the firm's total cost will just equal its total revenue. |
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Term
| Fixed-Cost (FC) Contribution Per Unit |
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Definition
| The selling price per unit minus the variable cost per unit. |
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Term
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Definition
| Evaluating the change in total revenue and total cost from selling one more unit to find the most profitable price and quantity. |
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Term
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Definition
| The change in total revenue that results from the sale of one more unit of a product. |
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Term
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Definition
| The change in total cost that results from producing one more unit. |
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Term
| Rule for Maximizing Profit |
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Definition
| The highest profit is earned at the price where marginal cost is just less than or equal to marginal revenue. |
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Term
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Definition
| Profit on the last unit sold. |
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Term
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Definition
| Setting prices that will capture some of what customers will save by substituting the firm's product for the one currently being used. |
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Definition
| The price a consumer expects to pay. |
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Term
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Definition
| Setting some very low prices-real bargains-to get customers into retail stores. |
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Term
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Definition
| Setting some very low prices to attract customers but trying to sell more expensive models or brands once the customer is in the store. |
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Term
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Definition
| Setting prices that have special appeal to target customers. |
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Term
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Definition
| Setting prices that end in certain numbers. |
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Term
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Definition
| Setting a few price levels for a product line and then marking all items at these prices. |
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Term
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Definition
| Setting an acceptable final consumer price and working backward to what a producer can charge. |
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Term
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Definition
| Setting a rather high price to suggest high quality or high status. |
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Term
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Definition
| Setting prices for a whole line of products. |
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Term
| Complementary Product Pricing |
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Definition
| Setting prices on several related products as a group. |
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Term
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Definition
| Setting one price for a set of products. |
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Term
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Definition
| Offering a specific price for each possible job rather than setting a price that applies for all customers. |
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Term
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Definition
| A price that is set based on bargaining between the buyer and seller. |
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