Pricing Strategies and Contestable Markets (Edexcel A-Level Economics A): Flashcards
📚Flashcards
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Practise the cards
10 cards from this deck
Profit maximisation pricing rule
Profit maximisation pricing rule
Output where
Revenue maximisation pricing rule
Revenue maximisation pricing rule
Output where
Sales maximisation pricing rule
Sales maximisation pricing rule
Output where
Allocative efficiency pricing rule
Allocative efficiency pricing rule
Output where
Cost-plus pricing
Cost-plus pricing
Calculate avg cost, add mark-up for profit per unit
Predatory pricing
Predatory pricing
Price below avg variable cost to drive out rivals
Legal status of predatory pricing
Legal status of predatory pricing
Illegal under competition law
Areeda-Turner principle
Areeda-Turner principle
Pricing below avg variable cost indicates predatory intent
Limit pricing
Limit pricing
Price below profit-max level to deter new entrants
Network effects
Network effects
Product used because many others use it; barrier to entry