MGMA01H3 Study Guide - Final Guide: Marketing Mix, Personal Selling, Marketing Strategy
Document Summary
The demand curve is used to find the optimal price, and marginal cost, which then leads to marginal revenue. The break-even analysis is found by using the total revenue curve, and the total cost curve to find the break-even point. The total cost curve is found by adding the total variable costs and the total fixed costs. = quantity price fixed costs quantity variable costs. The price is not to recover costs, but to capture the perceived value of the product. Buyers" perceptions of value: start with the price you charge, find the cost structure. Enter the market at a price to make a short-term profit: high quality product, attract quick customers, huge competition for competitors. Enter the market at a low price to build rapidly: market responds quick (due to price, huge competition (due to price) Economic notions of utility known for rational consumers and the expected utility theory which are the economic notions of utility.
