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Final L17 Ch13
average revenue (AR)
the average amount of money received for selling one unit of a product, or simply the price of that unit.
the practice of exchanging goods and services for other goods and services rather than for money
a technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output
a graphic presentation of the break-even analysis that shows when total revenue and total cost intersect to identify profit or loss for a given quantity sold
break-even point (BEP)
the quantity at which total revenue and total cost are equal
a graph relating the quantity sold and price, which shows the maximum number of units that will be sold at a given price
factors that determine consumers' willingness and ability to pay for goods and services
a continuing, concise trade--off of incremental costs against incremental revenue
marginal cost (MC)
the change in total cost that that results from producing and marketing one additional unit
marginal revenue (MR)
the change in total revenue that results from producing and marketing one additional unit
the money or other considerations (including other goods and services) exchanged for the ownership or use of good or service
price elasticity of demand
the percentage change in quantity demanded relative to a percentage change in price
factors that limit the range of prices a firm may set
specifying the role of price in an organization's marketing and strategic plans
profit = total revenue - total cost; or profit = (unit price x quantity sold) - (fixed cost + variable cost)
the ratio of perceived benefits to price; or value = perceived benefits / price
the practice of simultaneously increasing product and service benefits while maintaining or decreasing price