The which is given up in an exchantg to acquire a good or service
Price
The price charged to customers multipled by the number or units sold.
Revenue
Revenue minus expenses.
Profit
Net profit after taxes divided by total assets.
Return on Investmet (ROI)
A company's product sales as a percentage of total sales for that industry.
Market Share
A pricing objective that maintains existing prices or meets the competition's prices.
Status Quo Pricing
The quantity of a product that will be sold in the market at various prices for a specified period.
Demand
The quantity of a product that will be offered to the market by a supplier at various prices for a specified period.
Supply
The price at which demand and supply are equal.
Price Equilibrium
Consumers' responsiveness or sensitivity to changes in price.
Elasticity of Demand
A situation in which consumer demand is senstitive to changes in price.
Elastic Demand
A situation in which an increase or decrease in price will not significantly affect demand for the product.
Inelastic Demand
A situation in which total revenue remains the same when prices change.
Unitary Elasticity
A technique for adjusting prices that uses complex mathematical software to profitably fill unused capacity by discounting early purchases, limiting early sales at these discounted prices, and overbooking capacity.
Yield Management Systems (YMS)
A cost that varies with changes in the level of output.
Variable Cost
A cost that does not change as output is increased or decreased.
Fixed Cost
Total variable cost divided by quantity of output.
Average Variable Cost (AVC)
Total costs divided by quantity of output.
Average Total Cost (ATC)
The change in total costs associated with a one-unit change in output.
Marginal Cost (MC)
The cost of buying the product from the producer, plus amounts for profit and for expenses not otherwise accounted for.
Markup Pricing
The practice of marking up prices by 100%, or doubling the cost.
Keystoning
A method of setting prices that occurs when marginal revenue equals marginal cost.
Profit Maximization
The extra revenue associated with selling an extra unit of output or the change in total revenue with a one-unit change in output.
Marginal Revenue (MR)
A method of determining what sales volume must be reached before total revenue equals total costs.
Break-Even Analysis
Stocking well-known branded items at high prices in order to sell store brands at discounted prices.
Selling Against the Brand
A private electronic network that links a company with its suppliers and customers.
Extranet
Charging a high price to help promote a high-quality image.