Supply and demandMarket forces that are responsible for pricing in a competitive market.
Price elasticityHow much supply and demand change when price changes.
Market powerThe ability of a buyer or seller to influence prices.
Market structureThe number and size of buyers and sellers in a market.
MonopolyA single seller that dominates a market such that they can control prices.
Perfect competitionA market of many small buyers and sellers that individually have no influence over prices.
Price sensitivityHow much a buyer cares about price for a particular good or service.
Price discriminationSellers that find ways to charge price sensitive customers less and price insensitive customers more e.g. coupons.
Predatory pricingPricing below cost to hurt the competition.
DumpingSelling goods cheaply in a foreign market.
CartelsWhen sellers agree to set prices at some level. An anti-competitive practice.
Product differentiationProducts that are unique in the minds of customers such that they may command a unique price.
CommoditiesGoods that are viewed as indistinguishable by consumers such that they will buy on price alone.
Price warsPrice battles between sellers.
Bidding warsPurchasing battles between buyers.
Product bundlingDiscounts for packages of services or products.
Dynamic pricingPrices that are set in real-time based on behavior, competition or demand.
Peak pricingHigher prices during peak demand. Also known as surge pricing.
Loss leader pricingA cheap price designed to attract customers.
Penetration pricingA cheap price designed to build market share.
Skimming pricingA high initial price designed to target customers who want to be first to try a new thing.
Psychological pricingPricing based on customer perceptions.
Cost-plus pricingSellers that base their prices on their costs plus some markup.
Price leadershipA firm that competes by consistently offering the lowest prices, often based on lower costs and greater scale.
AuctionsA market based on competition between buyers for a product with limited supply.
Market clearing priceThe price at which all supply will be sold.
Substitution effectThe ability of buyers to substitute other goods when prices change.
Law of diminishing marginal utilityConsumers will only buy so much, even if the price goes very low.
Price gougingIncreasing prices excessively in a time of crisis or shortage.
Price umbrellaA price set by a dominant competitor that influences the prices of all sellers.
Bargaining powerThe power of buyers and sellers to negotiate prices.
Customary priceA long established price. Consumers may resist change to a customary price.
Sticky priceA price that consumers strongly prefer such that demand drops if you change it.
Snob effectLuxury consumers that abandon a previously high priced brand when it is discounted too often.
Benchmark priceA recent price that buyers and sellers may reference.
Too cheap to meterA resource that is so inexpensive that it can be offered on a flat rate basis for somewhat unlimited consumption.
InflationBroad and sustained price increases across an economy.
DeflationBroad and sustained price decreases across an economy.
Superior goodA good that is demanded more as income rises.
Inferior goodA good that is demanded less as income rises.