Factors Affecting Price Determination in Tourism and Hospitality Industry
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Questions and Answers

Which factor is the most important in determining the price of a product in the tourism and hospitality industry?

  • The utility of the product
  • The demand for the product
  • The cost of the product (correct)
  • The price of competitors

    • What does the law of demand state?

  • The higher the price, the lower the demand
  • The lower the price, the lower the demand
  • The lower the price, the higher the demand (correct)
  • The higher the price, the higher the demand

    • Which factor concerns the seller when determining the price of a product?

  • The price of competitors
  • The demand for the product
  • The utility of the product
  • The cost of the product (correct)

    • What does the price range of a product depend on?

    <p>The demand for the product</p> Signup and view all the answers

    Which factor affects price determination by considering the pricing strategies of other businesses in the market?

    <p>The price of competitors</p> Signup and view all the answers

    Which factor is the benchmark for setting the price of a product in the tourism and hospitality industry?

    <p>The cost of the product</p> Signup and view all the answers

    What does the law of demand state in relation to price and demand?

    <p>The lower the price, the higher the demand</p> Signup and view all the answers

    What factor determines the upper limit of the price range of a product?

    <p>The demand for the product</p> Signup and view all the answers

    Which factor affects price determination by considering the pricing strategies of other businesses in the market?

    <p>The price of competitors</p> Signup and view all the answers

    What is the buyer's concern when determining the price of a product?

    <p>The utility of the product</p> Signup and view all the answers

    Study Notes

    Determining Price in Tourism and Hospitality

    • The most important factor in determining the price of a product in the tourism and hospitality industry is demand.

    Law of Demand

    • The law of demand states that as the price of a product increases, the demand for it decreases.

    Price Determination Factors

    • The seller considers the cost of production when determining the price of a product.
    • The price range of a product depends on the cost of production, market conditions, and competition.

    Competitive Pricing

    • The pricing strategies of other businesses in the market (competitors) affect price determination.

    Benchmark Pricing

    • The benchmark for setting the price of a product in the tourism and hospitality industry is the market price.

    Law of Demand and Price

    • The law of demand states that as the price of a product increases, the demand for it decreases, and vice versa.

    Upper Price Limit

    • The upper limit of the price range of a product is determined by the maximum amount customers are willing to pay.

    Competitive Pricing Strategies

    • Considering the pricing strategies of other businesses in the market affects price determination.

    Buyer's Concern

    • The buyer's primary concern when determining the price of a product is the value they receive for their money.

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    Description

    Test your knowledge on factors that affect price determination in the tourism and hospitality industry. Explore how product cost, distribution costs, and selling and promotion costs influence pricing strategies.

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