A business must take many factors, including production costs, competition and demand, into account before deciding on the price of a product.
Which of the following best describes price?
The cost of selling items
The amount customers are charged for items
The revenue earned from selling items
When is penetration pricing used?
To gain market share
To make as large a profit as possible
To cover costs and breakeven
When is market skimming pricing used?
What is the selling price of an item which costs £5 to make and has a 50% mark up?
When is a profit made on the sale of a product?
When price more than covers the firm's revenue
When price matches rivals' price
When price covers the firm's costs
What does a cut in price usually increase?
Which pricing strategy would a business use to encourage a trial purchase?
Market skimming pricing
Cost plus pricing
Which of the following could a business use to ensure a profit is made when an item is sold?
What is the best pricing method for a well known firm selling a new high-tech, high-quality mobile phone model most likely to be?
Which pricing method is illegal in the UK?