| A | B |
|---|
| Price- | actual amount customers pay and the methods of increasing the value of the product to the customers. |
| Elasticity of demand- | describes the relationship between changes in a product’s price and the demand for that product. |
| Inelastic demand- | market situation in which a price decrease will decrease total revenue. |
| Elastic demand- | market situation in which a price decrease will increase total revenue. |
| Selling price- | the price charged for a product or service. |
| Product cost- | includes the cost of parts and raw materials (or the price paid to a supplier for finished products), labor, transportation, insurance, and an amount for damaged, lost, or stolen products. |
| Gross margin- | the difference between the cost of the product and the selling price. |
| Operating expenses- | all costs associated with business operations. |
| Net profit- | the difference between the selling price and all costs and operating expenses associated with the product sold. |
| Markup- | am amount added to the cost of a product to determine the selling price |
| Markdown- | a reduction from the original selling price. |
| Market price- | point where supply and demand are equal. |
| Skimming price- | very high price designed to emphasize the quality or uniqueness of the product. |
| Penetration price- | very low price designed to increase the quantity sold of a product by emphasizing the value. |
| Non-price competition- | when business decide to emphasize factors of their marketing mix other than price. |
| One-price policy- | all customers pay the same price. |
| Flexible pricing policy- | allows customers to negotiate the price within a price range. |
| Price lines- | distinct categories of prices based on differences in product quality and features. |
| FOB pricing- | identifies the location from which the buyer pays the transportation costs and takes title to the products purchased. |
| Zone pricing- | different product or transportation costs are set for specific areas (zones) of the seller’s market. |
| Discounts and allowances- | reductions in a price given to the customer in exchange for performing certain marketing activities or accepting something other than what would normally be expected in the exchange. |
| Breakeven point – | amount that must be sold just to cover all costs. |
