Pricing Methods and Price Elasticity Flashcard

Front

What is price?

Back

The amount of money producers are willing to sell or consumers are willing to buy for

Front

What is market skimming?

Back

Setting a high price for a unique product

Front

What is an advantage of market skimming?

Back

It helps recover research costs

Front

What is a disadvantage of market skimming?

Back

It may backfire with competitors

Front

Penetration pricing

Back

Setting a low price to attract customers

Front

What is an advantage of penetration pricing?

Back

It attracts customers more quickly

Front

What is a disadvantage of penetration pricing?

Back

Low revenue due to lower prices

Front

Competitive pricing

Back

Setting a price similar to competitors

Front

What is an advantage of competitive pricing?

Back

It allows competition on service and quality

Front

What is a disadvantage of competitive pricing?

Back

It requires finding other ways to compete