TLE.4 - Markup

Price Discrimination

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

Resale Price Discrimination

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

Predatory Fixing

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

Horizontal Price Fixing

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

Markup

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

Cost Price

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

Selling Price

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

Initial Markup

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

Maintained Markup

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

Markdown

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