MGTA02H3 Chapter Notes - Chapter 7: Walmart, Scenic Design, Psychological Pricing
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MGTA02H3 Full Course Notes
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Variable costs: costs that change with the number of goods and services sold ex. Fixed costs: costs that aren"t affected by the costs of goods and services sold ex. Equipment to make coffee, rent space, paying workers. Break-even analysis: assessment to find the best number of goods or services that must be sold at a given price to make a profit. Break even point (in units) = total fixed costs / [price variable costs] Price leadership: dominant firm establishes a price and other companies follow along. They compete by using different advertising campaigns, personal selling, and service, not price ex. Price skimming: making product really high priced to earn max. profit on each unit sold ex. Penetration pricing: deciding to price a new product very low to sell the most units possible and to build customer loyalty ex. Price lining: offering all items in certain categories at a limited number of prices ex.
