Cost plus pricing means
fixing the price by taking into account
the cost per unit plus profit margin.
☻
☻AFC + AVC
☻
☻AFC...
 The economic concept of marginalism is replaced by the
practical concept of incrementalism.
 While discussing the shor...
The difference between the “Shut-Down
Point” and “Break Even Point” is illustrated in above figure
where B represents the ...
Multi Product
Price of Substitute
Goods
The Lass
Lender Case
Pricing of
Complementary
Products
Tie in Sales
Two Part
...
A product mix includes at least one or
usually several product lines. A product line is a group of
products which perform ...
Methods of transfer pricing.
Types of Price Discrimination
Pricing Practices- Economics
Pricing Practices- Economics
Pricing Practices- Economics
Pricing Practices- Economics
Pricing Practices- Economics
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Pricing Practices- Economics

Pricing Practices.
Published on: Mar 4, 2016
Published in: Education      Technology      Economy & Finance      
Source: www.slideshare.net


Transcripts - Pricing Practices- Economics

  • 1. Cost plus pricing means fixing the price by taking into account the cost per unit plus profit margin. ☻ ☻AFC + AVC ☻ ☻AFC Includes ☻
  • 2.  The economic concept of marginalism is replaced by the practical concept of incrementalism.  While discussing the short-run behaviour of a competitive firm, they made a reference to the “ Shut-Down Point”  If the product price is below the average variable costs, it may pay the firm to shut-down its plant.  If the product price exactly covers the average variable cost, it makes no difference, except for non-financial reasons, if or not the plant is to be operated.  If the price exceeds average variable cost, it is better for the firm to operate than to shut down.  The price which covers average total costs (fixed and variable both) is break-even price.
  • 3. The difference between the “Shut-Down Point” and “Break Even Point” is illustrated in above figure where B represents the “break even point” and S, the Shutdown point. Shut Down Price OP is less than the break even price OP’. This policy enables the company to earn additional revenue at no additional fixed cost.
  • 4. Multi Product Price of Substitute Goods The Lass Lender Case Pricing of Complementary Products Tie in Sales Two Part Tariff
  • 5. A product mix includes at least one or usually several product lines. A product line is a group of products which perform generally similar functions and which are somewhat similar in physical characteristics. E.g. Pocket books is a product line, text book is another. Within each product line, there may be numerous varieties which differ in size, nature, functions performed, strength, price, colour, package etc. Problems of Sale of Multiple Products Product-Line Coverage Product- Line Pricing
  • 6. Methods of transfer pricing. Types of Price Discrimination