Question | Answer |
Price | The amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service |
Dynamic pricing | Charging different prices depending on individual customers and situations |
Target costing | Pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met |
Fixed costs | Costs that do not vary with production or sales level |
Variable costs | Costs that vary directly with the level of production |
Total costs | The sum of the fixed and variable costs for any given level of production |
Experience curve (learning curve) | The drop in the average per-unit cost that comes with accumulated production experience |
Demand curve | A curve that shows the number of units the market will buy in a given time period, at different prices that might be charged |
Price elasticity | A measure of the sensitivity of demand to changes in price |
Cost-plus pricing | Adding a standard markup to the cost of production |
Break-even pricing (target profit pricing) | Setting price to break even on the costs of making and marketing a product, or setting price to make a target profit |
Value-based pricing | Setting price based on buyers’ perceptions of value rather than on the seller’s cost |
Value pricing | Offering just the right combination of quality and good service at a fair price |
Competition-based pricing | Setting prices based on the prices that competitors charge for similar products |