Objective 3.03D Employ Pricing Strategies to Determine Prices Part IV – Pricing Terms  

Objectives: a. Define the following terms: floors, ceilings, and elasticity. b. Describe the importance of determining pricing floors and ceilings. c. Explain process for setting prices. d. Estimate demand for product. e. Implement process for setting prices.  

Price Ceilings and Floors Price ceiling is the highest price that is allowed to be charged for a certain good or survive in an economy, while the price floor is the lowest possible price

Setting Prices Your event must have a high-enough price to cover the costs of your event, as well as to provide you a revenue stream, if you're expecting to make a profit from the event attendance itself The price of your event determines, in part, the venue that you select. You shouldn't charge thousands of dollars for an event and host it in a 'budget' venue. Conversely, you need to charge enough that your event price covers the cost of your venue and other event costs.

Demand forecasting is the activity of estimating the quantity of a product or service that consumers will purchase. Demand forecasting involves techniques including both informal methods, such as educated guesses, and quantitative methods, such as the use of historical sales data or current data from test markets

Demand forecasting may be used in making pricing decisions, in assessing future capacity requirements, or in making decisions on whether to enter a new market. Is the demand elastic or inelastic. Elastic means that if price changes, demand changes. Inelastic means demand will not change if price changes.