IGCSE Business Studies: Price (Lesson 4)

The price of a product has a significant impact on a customer's perception of the product.

• True

• False

Psychological pricing is

• a price set just above a whole number

• a price set just below a whole number

• a price set to give the perception of the product being much more expensive that it really is

• a price set to get customers to buy the product as a status symbol

Dynamic pricing involves using different prices for the same market segments.

• True

• False

Which of the following is NOT a type of dynamic pricing?

• Different prices for men and women

• Different prices for peak and off peak times

• Different prices for high and low income earners

• Different prices for children and adults

Price elasticity of demand (PED) measures the responsiveness of price to changes in consumer demand.

• True

• False

Which of the following is NOT likely to be a feature of a product which is price inelastic

• It is a luxury product

• It takes up a small proportion of customers' incomes

• There are very few alternatives on the market

• It is a necessity

A new Mercedes Benz e-class vehicle is likely to be

• price elastic

• price inelastic

Knowledge of price elasticity of demand (PED) is important to businesses because it allows them to make informed (and possibly better) choices about the prices of their products.

• True

• False