TLE.4 - Markup

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Price Discrimination

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10 Terms
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Price Discrimination

  • retailer's charge different prices for the same item; this is legal and normal; based on location and type of customer

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Resale Price Discrimination

  • distributors and manufacturers get resellers, they will set specific price for resellers at a set price

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Predatory Fixing

  • entrepreneur/business owner will set their price very low just to eliminate the competition

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Horizontal Price Fixing

  • when different business owners will have an agreement to price their products the same

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Markup

  • difference between the cost of the item and its selling price

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Cost Price

  • amount of money that is spent to produce goods or services before any profit is added

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Selling Price

  • amount of money a buyer pays for a good or service

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Initial Markup

  • difference between the original price and the cost whether an item was sold or unsold

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Maintained Markup

  • difference between the actual selling price and the cost after an item was sold

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Markdown

  • difference between the original selling price and the new selling price

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