Stanley J. Shapiro
Kenneth B. Wong,
Queens School of Business
William D. Perreault,
University of North Carolina
E. Jerome McCarthy,
Michigan State University
| Average cost (per unit) | The total cost divided by the related quantity.
(See Refer to page(s) 568)
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| Average fixed cost (per unit) | The total fixed cost divided by the related quantity.
(See Refer to page(s) 568)
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| Average variable cost (per unit) | The total variable cost divided by the related quantity.
(See Refer to page(s) 568)
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| Average-cost pricing | Adding a reasonable markup to the average cost of a product.
(See Refer to page(s) 567)
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| Bait pricing | Setting some very low prices to attract customers but trying to sell more expensive models or brands once the customer is in the store.
(See Refer to page(s) 581)
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| Bid pricing | Offering a specific price for each possible job rather than setting a price that applies for all customers.
(See Refer to page(s) 585)
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| Break-even analysis | An approach to determine whether the firm will be able to break even-that is, cover all its costs-with a particular price.
(See Refer to page(s) 573)
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| Break-even point (BEP) | The sales quantity where the firm's total cost will just equal its total revenue.
(See Refer to page(s) 573)
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| Complementary product pricing | Setting prices on several related products as a group.
(See Refer to page(s) 584)
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| Demand-backward pricing | Setting an acceptable final consumer price and working backward to what a producer can charge.
(See Refer to page(s) 583)
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| Experience curve pricing | Average-cost pricing using an estimate of future average costs.
(See Refer to page(s) 571)
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| Fixed-cost (FC) contribution per unit | The selling price per unit minus the variable cost per unit.
(See Refer to page(s) 574)
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| Full-line pricing | Setting prices for a whole line of products.
(See Refer to page(s) 583)
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| Leader pricing | Setting some very low prices-real bargains-to get customers into retail stores.
(See Refer to page(s) 581)
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| Long-run target return pricing | Pricing to cover all costs and over the long run achieve an average target return.
(See Refer to page(s) 573)
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| Markup | A dollar amount added to the cost of products to get the selling price.
(See Refer to page(s) 564)
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| Markup chain | The sequence of markups firms use at different levels in a channel, which together determine the price structure in the whole channel.
(See Refer to page(s) 566)
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| Negotiated price | A price that is set based on bargaining between the buyer and seller.
(See Refer to page(s) 585)
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| Odd-even pricing | Setting prices that end in certain numbers.
(See Refer to page(s) 582)
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| Prestige pricing | Setting a rather high price to suggest high quality or high status.
(See Refer to page(s) 582)
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| Price lining | Setting a few price levels for a product line and then marking all items at these prices.
(See Refer to page(s) 582)
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| Product-bundle pricing | Setting one price for a set of products.
(See Refer to page(s) 584)
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| Psychological pricing | Setting prices that have special appeal to target customers.
(See Refer to page(s) 581)
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| Reference price | The price a consumer expects to pay.
(See Refer to page(s) 579)
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| Stockturn rate | The number of times the average inventory is sold during a year.
(See Refer to page(s) 565)
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| Target return pricing | Pricing to cover all costs and achieve a target return.
(See Refer to page(s) 572)
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| Total cost | The sum of total fixed and total variable costs.
(See Refer to page(s) 568)
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| Total fixed cost | The sum of those costs that are fixed in total, no matter how much is produced.
(See Refer to page(s) 568)
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| Total variable cost | The sum of those changing expenses that are closely related to output, such as expenses for parts, wages, packaging materials, outgoing freight, and sales commissions.
(See Refer to page(s) 568)
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| Value-in-use pricing | Setting prices that will capture some of what customers will save by substituting the firm's product for the one currently being used.
(See Refer to page(s) 579)
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2002 McGraw-Hill Higher Education