Pricing Decisions (AQA A-Level Business): Flashcards

Long-term approaches to setting prices

Starts high at launch, gradually lowers over time

Starts low to gain share, then increases

Established brands with strong brand image & market power

No influence; follows the going/market rate

Strategies: long-term; Tactics: short-term

Prices below cost to attract customers into store/site

How sensitive demand is to price changes

Revenue falls (demand drops significantly)

% change in quantity demanded ÷ % change in price