MGTA01H3 Chapter Notes - Chapter 7: Psychological Pricing, Variable Cost
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MGTA01H3 Full Course Notes
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Ch7: pricing and distributing goods and services (pricing objectives and tools) Pricing: deciding what the company will receive in exchange for its product. Pricing objectives: goals that producers hope to attain in pricing products for sale. Conversely, if prices are set too high, the company will make a large profit on each item but will sell fewer units, resulting in excess inventory and a need to reduce production operations. To avoid these problems, companies try to set prices to sell the number of units that will generate the. In calculating profits, managers weigh receipts against costs for materials and labour to create the. But they may also consider the capital resources (plant and equipment) that the company must tie up to highest possible total profits. product. generate that level of profit. The cost of marketing (such as maintaining a large sales staff) can also be substantial.
