Price Determination Vocabulary Quiz

What is the best definition of fixed costs?

• Costs that change depending on how many items are sold

• Costs that only occur if sales are high

• Costs that stay the same regardless of the level of sales

• Costs paid in even fixed amounts

What are variable costs?

• One-off payments made by the owner

• Costs that increase as more fish is sold

• Monthly payments that never change

• Advertising and insurance costs

Which of the following is an example of a direct cost?

• Shop rent

• Electricity bill

• Fish used in each portion sold

• Staff training costs

What is meant by the term revenue?

• The money left after all costs are paid

• The amount of money spent on marketing

• The total income from selling goods or services

• The price paid to suppliers

What does profit mean?

• Revenue minus expenses

• Costs plus tax

• The amount of money needed to break even

• The price set by customers

Why is break-even important in pricing decisions?

• It tells the owner how much stock to order

• It shows how much to charge customers

• It helps calculate how many items must be sold to cover costs

• It measures how popular the product is

What does 'Cost of Goods Sold (COGS)' refer to in your assessment?

• The price customers pay for fish

• The total cost of making and selling the fish that has been sold

• The rent paid by the fish and chip shop

• The amount of money spent on advertising

What is a demand curve used for?

• To show the fixed cost per item

• To show how costs change over time

• To show how many customers are happy

• To show how quantity demanded changes as price changes

A supply curve shows...

• The total number of sales each week

• How much a business is willing to supply at different prices

• The total fixed and variable costs combined

• The quantity customers will buy at a single price

Why should you include research evidence in your pricing decision?

• To make your work look longer

• To help you explain how your price meets customer expectations

• To copy what other shops are doing

• To avoid making a decision yourself