1. A cost that change with the level of output
- Variable Costs
- Fixed Costs
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2. What is meant by Cost-plus Pricing
- This is the method of pricing which considers the toal cost per unit and then adds on a percentage to arrive at a final price.
- For example selling a product at £49.99 instead of £50 makes customers think of it as less than £50
3. Define what is meant by Penetration Pricing
- this strategy uses a low price to enter the market & gain market share
- this strategy uses a high price to enter the market. Even though the price is high, some people may still be eager to try a new product once sales from the group of people disappear the price of the product can decrease to attract new customers.
4. Define a Democratic Leader
- behave rather as a parent might in making family decisions. They consult at every level and explain their reasons, but take the final decision themselves.
- guide rather than dictate, consulting widely and encouraging everyone to participate in the decision making process.
- take top-down decisions without consulting employees to find out their views. they may provide very little information on the reasons for the decision
5. Which one of these is a non profit motive for becoming an entrepreneur
- getting respect
- Being self satisfied
- making profit
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