Pricing Cost: What Motivates Mark-up and Break-Even Pricing


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Which 'P' of the marketing mix has the most flexibility to change?

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1. What is the result when the marginal cost (MC) is less than the average variable cost (AVC)?

2. How does a company calculate one unit of production?

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About This Quiz & Worksheet

Price is the most flexible of the four Ps in the marketing mix (product, place, promotion, and price), and this quiz and worksheet combination will test your understanding of two systems that you can use to control pricing: markup and break-even pricing.

Quiz & Worksheet Goals

In these assessments, you'll be tested on:

  • The four Ps in the marketing mix
  • Your understanding of variable and fixed costs
  • The definition of markup pricing

Skills Practiced

  • Reading comprehension - ensure that you draw the most important information from the related business lesson
  • Making connections - use your understanding of cost and pricing
  • Defining key concepts - ensure that you can accurately define main phrases, such as markup and break-even pricing

Additional Learning

To learn more about pricing, review the accompanying lesson titled Pricing Cost: What Motivates Mark-up and Break-Even Pricing. This lesson covers the following objectives:

  • Define pricing as the easiest of the four Ps to manipulate
  • Understand costs per unit
  • Differentiate between AVC, ATC, and MC
  • Discuss some other forms of pricing