| Price | The amount of money and/or other items with utility needed to acquire a product.
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| Barter | The exchange of goods and/or services for other products.
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| Value | The ratio of perceived benefits to price and any other incurred costs.
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| Pricing objective | The desired outcome that management seeks to achieve with its pricing structure and strategies.
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| Base price | The price of one unit of the product at its point of production or resale. Same as list price.
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| Expected price | The price at which customers consciously or unconsciously value a product—what they think the product is worth.
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| Inverse demand | A price-volume relationship such that the higher the price, the greater the unit sales.
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| Fixed cost | A cost that remains constant regardless of how many items are produced or sold.
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| Total fixed cost | The sum of all fixed costs.
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| Average fixed cost | The total fixed cost divided by the number of units produced.
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| Variable cost | A cost that changes directly in relation to the number of units produced or sold.
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| Total variable cost | The sum of all variable costs.
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| Average variable cost | The total variable cost divided by the number of units produced.
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| Total cost | The sum of total fixed cost and total variable cost for a specific quantity produced or sold.
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| Average total cost | The total cost divided by the number of units produced.
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| Marginal cost | The cost of producing and selling one more unit; that is, the cost of the last unit produced or sold.
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| Average fixed cost curve | A graph of average fixed cost levels showing a decline as output increases because the total of the fixed costs is spread over an increasing number of units.
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| Average variable cost curve | A graph of average variable cost levels, which starts high, then declines to its lowest point, reflecting optimum output with respect to variable costs (not total costs), and then rises.
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| Average total cost curve | A graph of average total costs, which starts high, then declines to its lowest point, reflecting optimum output with respect to total costs (not variable costs), and then rises because of diminishing returns.
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| Marginal cost curve | A graph of marginal cost levels, which slopes downward until marginal costs start to increase, at which point it rises.
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| Cost-plus pricing | A major method of price determination in which the price of a unit of a product is set at a level equal to the unit's total cost plus a desired profit on the unit.
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| Break-even analysis | A method of calculating the level of output at which total revenue equals total costs, assuming a certain selling price.
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| Break-even point | The level of output at which total revenue equals total costs, assuming a certain selling price.
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| Marginal revenue | The income derived from the sale of the last unit.
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| Average revenue | The unit price at a given level of unit sales. It is calculated by dividing total revenue by the number of units sold.
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| Pricing to meet competition | A pricing method in which a firm ascertains what the market price is and, after allowing for customary markups for middlemen, arrives at its own selling price.
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| Perfect competition | A market structure in which product differentiation is absent, buyers and sellers are well informed, and the seller has no discernible control over the selling price.
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| Dynamic pricing | A form of price adjustment that occurs instantly and frequently in accordance with what the market will bear.
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| Kinked demand | A condition in which total revenue declines when a product's price is increased or decreased in relation to the prevailing market level.
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| Oligopoly | A market structure dominated by a few firms, each marketing similar products.
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| Pricing below competition | One form of market-based pricing in which price is set below the level of your main competitors.
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| Pricing above competition | One form of market-based pricing in which price is set above the prevailing market level.
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