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Pricing Schools Business

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Factors Affecting Product Pricing in Business

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Factors Affecting Product Pricing in Business

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Questions and Answers

What is the ideal price point in economic theory?

The price that is the same as the competitors
The lowest price possible
The highest price the market will bear
The equilibrium point where the quantity supplied equals the quantity demanded (correct)

What is the main limitation of cost-plus pricing?

It is too complex to calculate
It does not take into account consumer views (correct)
It only works for small businesses
It takes into account consumer views

What is the purpose of penetration pricing?

To compete with similar products
To get a product established on the market (correct)
To make a high profit immediately
To reduce production costs

What is an example of non-price competition?

Offering a free gift with purchase (C) Signup and view all the answers

What is the goal of competitor-based pricing?

To charge a similar price to competitors (B) Signup and view all the answers

What may happen to the price of a product after it has been established on the market using penetration pricing?

It will increase (B) Signup and view all the answers

What is a potential consequence of using a penetration pricing strategy?

A price war among competitors (A) Signup and view all the answers

What is the purpose of a loss leader?

To attract customers to buy other products at normal prices (D) Signup and view all the answers

What is the main advantage of price discrimination?

Selling the same product at a range of different prices to suit different consumers (B) Signup and view all the answers

What is creaming or skimming?

A pricing strategy used for new products (D) Signup and view all the answers

What is the goal of a business that uses a loss leader strategy?

To attract customers to buy other products at normal prices (C) Signup and view all the answers

What is an example of price discrimination?

Selling a product at a lower price to students (D) Signup and view all the answers