Syllabus B

Pricing Decisions 12 / 13

a) Explain the factors that influence the pricing of a product or service.
b) Explain the price elasticity of demand.
c) Derive and manipulate a straight line demand equation. Derive an equation for the total cost function(including volume-based discounts).
d) Calculate the optimum selling price and quantity for an organisation, equating marginal cost and marginal revenue
e) Evaluate a decision to increase production and sales levels, considering incremental costs, incremental revenues and other factors.
f) Determine prices and output levels for profit maximisation using the demand based approach to pricing (both tabular and algebraic methods).
g) Explain different price strategies, including:
i) All forms of cost-plus
ii) Skimming
iii) Penetration
iv) Complementary product 
v) Product-line
vi) Volume discounting 
vii) Discrimination
viii) Relevant cost
h) Calculate a price from a given strategy using cost-plus and relevant cost.