Pricing

In a retail business, what number do you get by subtracting an item's cost from its price?

• Overhead

• Discount

• Profit

• Margin

A retail business must strike a compromise between two main factors when setting an item's price. What are these two main factors?

• Location and value

• Reasonable margin and customers' willingness to pay

• Advertising budget and cost of ads

• Quality and quantity

What is a "markdown"?

• A price reduction in order to boost the number of sales

• Another name for taking inventory

• A special tax-exempt item

• The sticker on the package stating the price

What is "market share"?

• The amount of floor space a retail store has

• the percentage that a store has of the total sales in its trading area

• The price of a store's shares on the stock market

• The shelf space a store devotes to any particular product

When supply goes down and/or consumer demand goes up, what usually happens to the price?

• drops

• nothing

• rises

What are "loss leaders" designed to do?

• Drive competitors out of business

• Reduce a store's tax burden

• Keep advertising budgets under control

• Attract more customers to come into the store

What did the Sherman Antitrust Act outlaw?

• Deceptive advertising

• Black-market goods

• Counterfeit money

• Monopolies and price fixing

What did the Clayton Antitrust Act of 1914 and the Robinson-Patman Act of 1936 outlaw?

• Price discrimination

• Collusion

• Undercutting the competition

• Pre-Thanksgiving sales

To a retail business owner, what is "cost"?

• The environmental damage caused by the store

• The amount paid to suppliers for merchandise

• The selling price

True or false: When a price is set too low, customers might think the product is defective.

• True

• False