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Predatory pricing is a commercial pricing strategy which involves the use of large scale undercutting to eliminate competition. This is where an industry dominant firm with sizable market power will deliberately reduce the prices of a product or service to loss-making levels to attract all consumers and create a monopoly. [1]
Company X sells its product to Company Y at an artificially low price, resulting in a low profit and a low tax for Company X in Africa. Company Y then sells the product to Company Z at an artificially high price, almost as high as the retail price at which Company Z then sells the final product in the US.
A company with large market share and the ability to temporarily sacrifice selling a product or service at below average cost can drive competitors out of the market, [4] after which the company would be free to raise prices for a greater profit. For example, many developing countries have accused China of dumping.
Product cost management (PCM) is a set of tools, processes, methods, and culture used by firms who develop and manufacture products to ensure that a product meets its ...
Resale price maintenance (RPM) or, occasionally, retail price maintenance is the practice whereby a manufacturer and its distributors agree that the distributors will sell the manufacturer's product at certain prices (resale price maintenance), at or above a price floor (minimum resale price maintenance) or at or below a price ceiling (maximum resale price maintenance).
A misuse case diagram is created together with a corresponding use case diagram. The model introduces 2 new important entities (in addition to those from the traditional use case model, use case and actor: Misuse case : A sequence of actions that can be performed by any person or entity in order to harm the system.
Cost-plus pricing is a pricing strategy by which the selling price of a product is determined by adding a specific fixed percentage (a "markup") to the product's unit cost. Essentially, the markup percentage is a method of generating a particular desired rate of return. [1] [2] An alternative pricing method is value-based pricing. [3]
Contribution margin-based pricing maximizes the profit derived from an individual product, based on the difference between the product's price and variable costs (the product's contribution margin per unit), and on one's assumptions regarding the relationship between the product's price and the number of units that can be sold at that price.