Price competition*

“Emphasizing price as an issue and matching or beating competitors’ prices.”

Nonprice competition*

“Emphasizing factors other than price to distinguish a product from competing brands.”

Pricing objectives*

“Goals that describe what a firm wants to achieve through pricing.”

Demand curve*

“A graph of the quantity of products a firm expects to sell at various prices if other factors remain constant.”

Price elasticity of demand*

“A measure of the sensitivity of demand to changes in price.”

Fixed costs*

“Costs that do not vary with changes in the number of units produced or sold.”

Average fixed cost*

“The fixed cost per unit produced.”

Variable costs*

“Costs that vary in proportion to the number of units produced or sold.”

Average variable cost*

“The variable cost per unit produced.”

Total cost*

“The sum of average fixed and average variable costs times the quantity produced.”

Average total cost*

“The sum of the average fixed cost and the average variable cost.”

Marginal cost (MC)*

“The extra cost incurred by producing one more unit of a product.”

Marginal revenue (MR)*

“The change in total revenue resulting from the sale of an additional unit of a product.”

Cost-volume-profit (CVP) analysis*

“Determining how changes in costs and sales volume impacts profits.”

Breakeven point*

“The point at which the costs of producing a product equal the revenue made from selling the product.”

Cost-based pricing*

“Adding a dollar amount or percentage to the cost of the product.”

Markup pricing*

“Adding to the cost of the product a predetermined percentage of that cost.”