ib business study guide

ib business study guide - Pricing:

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Pricing: Method adopted by a firm to set its selling price. It usually depends on  the firm's average costs, and on thecustomer's perceived value of the product  in comparison to his or her perceived value of the competing products. Different  pricing methods place varying degree of emphasis on selection, estimation,  and evaluation of costs,comparative analysis, and market situation.  Loss Leader: Good or service advertised and sold at below cost price. Its purpose is to  bring in (lead) customers in the retail store(usually a supermarket) on  the assumption that, once inside the store, the customers will be stimulated  to buy fullpriced items as well.  Shortage: Situation where the quantity available or supplied in a market falls short of  the quantity demanded or required at a given time or price. Surplus:  Extent to which generation of goods, services, and resources (such as capital)  exceeds their consumption. Surplus of resources is the bedrock on which capitalism is  built. Supply: Total amount  of a product (good or  service ) available for  purchase  at any  specified price. It is determined by: (1) Price: producers  will try to obtain  the highest  possible price whereas the buyers  will try to pay  the lowest possible price both settling  at the equilibrium price  where supply  equals   demand Demand: Desire for certain good or service supported by the capacity to purchase it. Equilibrium:
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This note was uploaded on 12/13/2011 for the course MATH 132 taught by Professor Julies during the Fall '08 term at Michigan State University.

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ib business study guide - Pricing:

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