ADM 2320 Lecture Notes - Lecture 10: Price Ceiling, Price Floor, Fixed Cost

• School: University of Ottawa
• Department: Administration
• Course: ADM 2320
• Professor: Gurprit Kindra

Document Summary

More to do with psychology than math. Value also depe(cid:374)ds o(cid:374) (cid:272)ou(cid:374)t(cid:396)(cid:455) of o(cid:396)igi(cid:374) (cid:373)ade i(cid:374) ca(cid:374)ada has a highe(cid:396) (cid:448)alue tha(cid:374) a shi(cid:396)t (cid:373)ade in bangladesh. Vodka (cid:449)he(cid:374) it"s see(cid:374) as a russian product rather than a canadian product, it has a higher perceived value. T(cid:396)agi(cid:272)all(cid:455) hip last (cid:272)o(cid:374)(cid:272)e(cid:396)t. could ha(cid:448)e i(cid:374)(cid:272)(cid:396)eased p(cid:396)i(cid:272)es! Price is something, but value is something totally different. Starts off as a commodit(cid:455) as (cid:455)ou (cid:373)o(cid:448)e up the (cid:448)alue (cid:272)hai(cid:374), the p(cid:396)i(cid:272)e i(cid:374)(cid:272)(cid:396)eased. /pou(cid:374)d as a commodity to having a cup at bridgehead. Cash discount, trade discount, psychological (13. 99 instead of 14) The product is distinct; less aware of substitutes; expenditure is a small proportion of income; product is viewed as prestigious. Range of pricing from price floor (cost of goods sold) to price ceiling (value pricing) Ca(cid:374)"t go lo(cid:449)e(cid:396) tha(cid:374) (cid:272)ost of goods sold; (cid:272)a(cid:374)"t go highe(cid:396) tha(cid:374) pe(cid:396)(cid:272)ei(cid:448)ed (cid:448)alue.