Importance of Price Price affects profits Profits a Total Revenue less Total Cost 兀=(P*Q)-(Qvc)(FC)
Importance of Price • Price affects profits: Profits = Total Revenue less Total Cost = (P*Q) - (Q*VC)-(FC)
Price-Quality Strategies Price Premium High Super Value Value Value Medium Overcharging Good-Value Value False Rip-Off Economy Economy
Price High Medium Low High Low Product Quality Med Premium Value Medium Value Economy Overcharging Rip-Off False Economy High Value Super Value Good-Value Price - Quality Strategies
consumer dena Demand curve:
• Demand Curve:
Influences on Shape of Demand Curve Market Structure . Monopoly .Oligopoly Monopolistic Competition Pure Competition:
Influences on Shape of Demand Curve Market Structure •Monopoly: •Oligopoly: •Monopolistic Competition: •Pure Competition:
Influences on Shape of Demand Curve Life Cvcle May see shifts of curve to the right due to ° promotion entry/exit of new competitors .change in taste A .change in technology 100 75 它50 25 10 30 Quantity
Influences on Shape of Demand Curve Life Cycle May see shifts of curve to the right due to: •promotion •entry/exit of new competitors •change in taste •change in technology A 0 25 50 75 100 0 10 20 30 Quantity Price