| A | B |
|---|
| elasticity of demand | describes the relationship between changes in a product's price and the demand for that product |
| inelastic demand | a price decrease will decrease total revenue |
| elastic demand | a price decrease will increase total revenue |
| break even point | the quantity of a product that must be sold for total revenues to match total costs at a specific price |
| selling price | the price charged for a product or service |
| product cost | includes the cost of parts and raw materials, labor, transportation, insurance, and an amount for damaged, lost, or stolen products |
| gross margin | the amount that is available to cover the business's expenses and provide a profit on the sale of the product |
| 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 |
| markup | an amount added to the cost of a product to determine the selling price |
| markdown | a reduction from the original selling price |
| skimming price | a very high price designed to emphasize the quality or uniqueness of the product |
| penetration price | a very low price designed to increase the quantity sold of a product by emphasizing value |
| nonprice competition | de-emphasizes price by developing a unique offering that meets an important customer need |
| one-price policy | means that 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 products prices or transportation costs are set for specific areas 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 |
| consumer credit | credit a retail business extends to the final consumer |
| trade credit | offered by one business to another business, often because of the time lag between when a sale is negotiated and when the products are actually delivered to the customer and used or resold |
| price | actual cost and the methods of increasing the value of the product to the customers |
| pricing | establishing and communicating the value of products and services to customers |
