MCS 1000 Chapter Notes - Chapter 13: Monopolistic Competition, Unit Price, List Price

• School: University of Guelph
• Department: Marketing and Consumer Studies
• Course: MCS 1000
• Professor: Bonifacio

Document Summary

Price is the money or other considerations (including other goods and services) exchanged for the ownership or use of a good or service. The factors that increase or decrease the final price of an offering, the amount of money exchanged for products is not always the same. The changes can be caused because of discounts, allowances, and extra fees. Value is defined as the ratio of perceived benefits to price. Because of this marketers must be careful if price is too low, for a low price can give the perceived notion that the product is low quality. Price equation: price = list price - incentives and allowances + extra fees. Price is also important since it is directly involved with the profits a company makes (profit = revenue - costs) There are four different types of competitive markets: pure monopoly, oligopoly, monopolistic competition, and pure competition. Another factor that has to be taken into account is competitor pricing.