MKT ch13

inelastic

1>PE a small decrease in price dosent really change demand

average revenue

=TR/Q

marginal revenue

=change in TR/ change in Q

elastic demand

PE>1 a small decrease in price creates a large increase in demand

margin analysis

a continuing concise trade off of incremental costs against incremental revenues

demand curve

a graph relating the quality sold and price, price by demand

demand factors

factors that determine consumers willingness and ability to pay for products and services

pricing constraints

factors that limit the range of prices a firm may set

pricing objectives

involve specifying the role of price in an organization's marketing and strategic plans

monopolistic competetion

is the second-most competitive market structure and very common.there are many buyers and sellers, and there are relatively few barriers to entry. The products are all very similar, but because consumers may perceive each seller's product differently, the sellers in a monopolistic competitive market are price makers.Each individual producer tries hard to distinguish his product through product differentiation.Each firm in monopolistic competition is trying to create a functional monopoly over its own version of a product. ex. peanut butter

pure monopoly

no competeion, sole seller of the product, but they must keep the price reasonable or competition could come into the field

price equation

price=list price -incentivies and allowances+extra fees

profit equation

profit=total revenue-total cost

price

the money or other considerations exchanged for the ownership or use of a product or service

price elasticity

the percentage change in quality demanded relative to a percentage change in price

value pricing

the practice of simultaneously

the 6 steps organizations go through to set price

1.identify pricing objectives and contraints 2. estimate demand and revenue 3. determine cost volume and profit relationships 4. select approximate price level 5. set list or quoted price 6. make special adjustments

total revenue

=price *quality

breakeven analysis

a technique profit relationship between total revenue and total cost to determin profit ability at various levels of output

barter

exchanging products and services for other products and services rather than for money

managing for long-run profits

give up immediate profit by developing quality products to penatrate competitive markets over the long term

pure competition

has almost no competetion is able to set the price (ex.selling corn)

maximizing current profit objective

is very common in many firms because the targets can be set and performance measured quickly

oligoply

not many competetions but they try to deferintate themselves by nonprice factors because that could lead to pricing war

breakeven point

the quality at which total revenue and total cost are equal

value

the ratio of percieved benefits to price ->percived benefits/price

target return objectives

when a firm sets a profit goal, usually determined by its board of directors

unitary demand

when the percentage change in price is identical in the percent change in demand

reference value

which involves comparing the costs and benefits of substitute items