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Week 8: Price (Legal and Ethical (Price ceiling and floor (Issues…

- - - - Intent to drive competitors out
  - - - Ensuring costs are managed appropriately
      - Ensuring we can charge an appropriate price
    - - Te lowest price we can sell the product for
    - - Customers perceived value
  - - - Economic-value pricing
      - Going-rate pricing
      - Sealed bid
    - - Seller paid on basis of performance offer
- - - - Do not vary with quantity produced/sold
      - Larger quantities=lower fixed costs
    - - Vary directly with the level of production
    - - Sum of fixed and variable costs
- - - - Charging different prices to different people
    - - Reducing price in short term to attract customers
    - - Modifying to the location
- - - - Commodity product, with many buyers and sellers
    - - Many buyers and sellers, with differentiated products across different prices
    - - A few sellers who are sensitive to each others pricing
    - - One seller
- - - - Inelastic
        
        Low levels of price sensitivity
      - Elastic
        
        High levels of price sensitivity
    - - Product Factors
        
        Perceived importance
        
        Availability of substitutes
        
        Perceived quality and exclusiveness