Chapter 13 - Chapter 13 Average Revenue AR average amount...

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Chapter 13 Average Revenue – AR – average amount of money received for selling one unit of a product, or simply the price of that unit ( AR = TR / Q = P ) Barter – practice of exchanging goods and services for other goods and services rather than for money Break Even Analysis – technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output Break Even Chart – graphic presentation of the break even analysis Break Even Point – quantity at which total revenue and total cost are equal ; profit then comes from units sold beyond the BEP Demand Curve – graph relating the quantity sold and price, which shows the maximum number of units that will be sold at a given price Demand Factors – factors that determine consumer’s willingness and ability to pay for goods and services (examples are factors influencing what consumers want/can buy and price) Fixed Cost – sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold Marginal Analysis – continuing, concise trade off of incremental costs against incremental revenues ; people will continue to do something as long as the incremental return exceeds the incremental cost Marginal Cost – change in total cost that results from producing and marketing one additional unit of a product ( change in total cost / 1 unit increase in quantity) Marginal Revenue – change in total revenue that results from producing and marketing one additional unit (MR = change in TR / 1 unit increase in Q) Price – money or other considerations (including goods and services) exchanged for the ownership or use of a good or service Price Elasticity of Demand – percentage change in quantity demanded relative to a percentage change in price (E = percentage change in quantity demanded / percentage change in price) Pricing Constraints – factors that limit the range of prices a firm may set Pricing Objectives – specifying the role of price in an organization’s marketing and strategic plans Profit Equation – profit = total revenue – total cost OR (unit price x quantity cost) – total cost Total Cost – total expense incurred by a firm in producing and marketing a product (sum of fixed and variable costs) Total Revenue – total money received from the sale of the product (TR = P x Q) Unit Variable Cost – variable cost expressed on a per unit basis ( variable cost / quantity) Value – ratio of perceived benefits to price (perceived benefits / price) Value Pricing – practice of simultaneously increasing product and service benefits while maintaining or decreasing price Variable Cost – sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold Chapter 16 Customer Service – ability of logistics management to satisfy users in terms of time, dependability,
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This note was uploaded on 05/04/2009 for the course MKTNG 330 taught by Professor Bita during the Spring '09 term at Montclair.

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Chapter 13 - Chapter 13 Average Revenue AR average amount...

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