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Match the verb on the left with a word on the right – Match the verb on the left with a word on the right., алгебра


II. Match the verbs on the left with their corresponding definitions on the right

1. to choose

a) to decide which one of a number of things you want.

2. to enjoy

b) to do what has been decided in an agreement or plan, or what is demanded by law.

3. to include

c) to get pleasure from something.

4. to keep to

d) to give someone food or drink, especially as part of a meal or in a restaurant, bar etc.

5. to put off

e) to make someone or something part of a larger group or set.

6. to serve

f) to wait until a later time to do something.

III. Match the words in column a with their synonyms in column b and antonyms in column c







1. convenient

2a. characteristic

3a. abnormal

2. different

2b. contrasting

3b. cheap

3. expen­sive

2c. dear

3c. fancy

4. famous

2d. essential

3d. general

5. full

2e. minor

3e. inconvenient

6. main

2f. particular

3f. main

7. particular

2g. simple

3g. minor

8. plain

2h. special

3h. ordinary

9. side

2i. sugary

3i. partial

10. spe­cial

2j. suitable

3j. similar

11. sweet

2k. well-known

3k. sour

12. typical

2l. whole

3l. unknown

IV. Give Ukrainian equivalents of the following words and expressions. Use a dictionary

appetizer; ask smb. to dinner; brunch; canteen; continental breakfast; diet; dinner of five courses; eat out; English breakfast; food and drink; formal dinner; frugal diet; go out to dinner; have four meal a day; high tea; preserved food; stand up meal; standing dish; staple food; wedding breakfast; wholesome food.

V. Match the English and Ukrainian equivalents

1. ask smb. to dinner

a) запросити кого-небудь на обід

2. dinner of five courses

b) здорова їжа

3. food and drink

c) їжа а-ля фуршет

4. formal dinner

d) їжа і пиття

5. frugal diet

e) консервовані продукти

6. go out to dinner

f) масові продукти харчування

7. have four meal a day

g) обід з п'яти страв

8. high tea

h) офіційний обід

9. preserved food

i) піти на обід у ресторан

10. stand up meal

j) постійна, чергова страва

11. standing dish

k) рання ситна вечеря з чаєм

12. staple food

l) скудне харчування

13. wedding breakfast

m) харчуватися чотири рази на день

14. wholesome food

n) частування гостей після вінчання чи весілля

VI. Fill in the gaps in the sentences below. The first letter or letters of the missing words are given, and the dashes correspond to the number of missing letters

1. A con _ _ _ _ _ _ _ _ brea _ _ _ _ _ , with cheeses and meats, is served and dinner is four courses and consists of good home cooking.

2. A new rest _ _ _ _ _ _ has just opened across the road.

3. For the second time that day she went to the can _ _ _ _ .

4. Out of curiosity, I ordered an appe _ _ _ _ _ off the typed list on the counter.

5. Students complained about the cafet _ _ _ _ food.

6. The hotel was nice, and the me _ _ s were really good.

7. The ticket includes entry and a four-cou _ _ _ me _ _ .

8. We are having fish for din _ _ _ tonight.


II. Match the verbs on the left with their corresponding definitions on the right

1. to comprise

a) to divide into smaller parts something that is already divided.

2. to consist of

b) to officially form a group or organization.

3. to constitute

c) to have the official power to control a country and the people who live there.

4. to include

d) to have as a part or member, containing in addition to another parts or members.

5. to rule

e) to divide or split into different parts, or to make something do this.

6. to separate

f) to be formed from two or more things or people.

7. to subdivide

g) to consist of particular parts, groups etc.

III. Match the words in column a with their synonyms in column b and antonyms in column c







1. beautiful

2a. chief

3a. cold

2. hot

2b. damp

3b. deep

3. humid

2c. empty

3c. dry

4. internal

2d. extensive

3d. external

5. long

2e. fast

3e. flat

6. main

2f. flat

3f. harsh

7. mild

2g. inner

3g. petty

8. plain

2h. lovely

3h. short

9. shallow

2i. moderate

3i. slow

10. swift

2j. moist

3j. ugly

11. uneven

2k. rough

3k. uneven

12. wet

2l. warm

3l. waterless

IV. Give Ukrainian equivalents of the following words and expressions. Use a dictionary

гірські квіти; пагорбкувата місцевість; державний герб; жити на острові; корінне населення; наша країна; моя батьківщина; нащадок стародавнього роду; ностальгія; перенаселення; порт змушеного заходу; працездатне населення; схил пагорба; торговий порт; туга за батьківщиною; цивільне населення.

V. Match the English and Ukrainian equivalents

1. civil population

a) гірські квіти

2. commercial port

b) державний герб

3. country sickness

c) жити на острові

4. descendant of an ancient family

d) корінне населення

5. hill country

e) наша країна

6. indigenous population

f) нащадок стародавнього роду

7. live on an island

g) пагорбкувата місцевість

8. mountain flowers

h) перенаселення

9. national emblem

i) порт змушеного заходу

10. population pressure

j) працездатне населення

11. port of distress

k) схил пагорба

12. the slope of a hill

l) торговий порт

13. this country

m) туга за батьківщиною

14. working population

n) цивільне населення

VI. Fill in the gaps in the sentences below. The first letter or letters of the missing words are given, and the dashes correspond to the number of missing letters

1. A large portion of the pop _ _ _ _ _ _ _ lives in poverty.

2. At last they reach the moun _ _ _ _ and begin to climb up.

3. At low tide it is sometimes just possible to cross the chan _ _ _ without swimming.

4. Flooding is likely in some coastal re _ _ _ _ of the Northeast.

5. For centuries, Switzerland was an isl _ _ _ of peace in troubled Europe.

6. For the rest, the arch _ _ _ _ _ _ _ could and did live off its own resources.

7. Hollywood is the cap _ _ _ _ of the movie industry.

8. The coastal areas were occupied by the descen _ _ _ _ of Greek colonists.

9. The principal river systems and their major trib _ _ _ _ _es are described below.


5. Match the words on the left with a definition on the right.

  1. asset management

  1. insurance

  1. re-insurance

  2. to merge

    1. a sum of money is paid to a company to take on a risk for you

    2. a company gives you financial advices, then manages your possessions.

    3. to join together to form a new company

    4. an insurance from other insurance companies, to share the risk of loss

Company presentation

1. You represent your company, and are preparing a presentation on the history of the company to give to a group of university graduates. Prepare your presentation.


In the introduction you should tell your audience what you are going to say. Use the sequencing words: first, first of all, firstly, second, secondly, then, after that, afterwards, next, lastly, finally, now/today.

Firstly I’m going to talk to you today about the key developments in the history of the company I work for and then tell you about the company’s current position.’

Main Body of the Presentation

Now prepare the body of the presentation. Don’t write the presentation, but make notes to help you remember what you want to say. Use the language in the box to tell the listener about the sequences of events.

There are (six) key dates company’s history…

Firstly, in 1950 …

After that …

Is that clear?


Now the company is a leader in the field of…

Are there any questions?

Thank you very much.

6. Some useful phrases for your company presentation.

I’m glad to see so many of you here today.

I’d like to talk about how we organize things in this department.

First I’ll describe our organization.

Finally, I’d like to discuss some future plans.

That’s all I wanted to say about training.

Moving on to my next point …

Excuse me, can you tell us when the report will be ready?

Sorry, I didn’t catch the question.

Could you bear with me?

Turnover rose by 12 cent last year.

We are predicting a slowdown next year.

As you can see from the graph, sales have increased dramatically.

Sales reached a peak in December.

They have declined since then.

These are difficult times for the company.

I’d like to finish by thanking you all.

I’d welcome your feedback.

7. Answer the following questions and prepare your own presentation.

1. What does your company do?

2. What is it called?

3. What kind of public image do you have?

4. How many people do you employ?

5. Where are your headquarters?

6. Do you have offices in other countries? If so, where?

7. What is your turnover, market share and net profits? Who is you main competitor?

8. Are you growing, shrinking or holding steady?

9. What are your most promised products and/or markets?

10. What problems are you having and how are you dealing with them?

      1. Unit 2. English Business Letters

Proper business letter writing is very important for normal commercial activity. In spite of the development of telephone, telex and telegraphic ways of communication and increasing personal contacts in international trade, the writing of letters continues. In fact most telephoned and telegraphed messages have to be confirmed by letters. Letter – writing is an essential part of business. The best way is to write simply and in an easy, natural way.

However, whether you write a special letter or make use of a standard letter, you should know the main parts of any business letter and its layout (расположение).

Ex.9. Match the verbs on the right with the nouns on the left.

to demonstrate

to exchange

to develop

to abandon

to remove

to make

to achieve

to press

to bear

to produce

a fortune

the government



a concept

a policy

the advantages


the goal

the products

Ex. 10. Generate other forms from these words.






to produce


to argue



to achieve



to starve

Ex. 11. Find in the text equivalents to the following words and word-combination.

неизбежность краха капитализма _____________________________________________

иметь неприятности с властями ______________________________________________

экономические силы ________________________________________________________

на протяжении всей истории _________________________________________________

прожить жизнь в ссылке _____________________________________________________

прикарманивать ____________________________________________________________

борьба за власть ____________________________________________________________

прибавочная стоимость ______________________________________________________

классовая борьба ____________________________________________________________

зарабатывать на жизнь ______________________________________________________

государство отомрет ________________________________________________________

«от каждого по способностям – каждому по потребностям»


Ex. 12. Use the following words to complete the sentences below.

a living, death, dedication, struggles, efforts, authorities, owner, activities, value

1. Marx’s revolutionary ______________ got him into trouble with the _______________.

2. Marx and his family might have starved to _______________.

3. Marx’s ______________ to his studies made it impossible for him to earn ___________.

4. He also argued that history has been a series of ______________ between economic classes.

5. According to Marx, goods and services had_________ because of the _________of workers.

6. Whatever was left over (profits) was pocketed by the factory ____________ – the capitalist.

Ex. 13. These are the answers to the questions. What are the questions?

1. On the London Stock Exchange.

2. “Principles of Political Economy and Taxation”

3. In the 1840s

4. Marx’s revolutionary activities

5. The Communist Manifesto

6. By economic forces

7. To those who created it: the workers

8. Because workers were underpaid

9. Once communism was achieved

10. “according to his ability” and “according to his needs”.


Text 4

Adam smith and “the wealth of nations”

The year of 1776 marked the publication in England of one of the most important books of our time , “The Wealth of Nations”. Written by Adam Smith, it earned the author the title “the father of economics.”

Smith objected to the principal economic believes of his day. He differed with the physiocrats who argued that land was the only source of wealth. He also disagreed with the mercantilists who measured the wealth of a nation by its money supply, and who supported government regulation of the economy on order to promote a “favourable balance of trade.”

In Smith’s view, a nation’s wealth was dependent upon production, not agriculture alone. How much is produced, he believed, depended upon how well it combined labour and the other factors of production. The more efficient the combination, the greater the output, and the greater the nation’s wealth.

The heart of Smith’s economic philosophy was his belief that the economy would work best if left to function on its own without government regulation. In this case, self-interest would lead business firms to produce only those products that customers wanted, and to produce them at the lowest possible cost. They would do this in order to leave behind their competitors and make the greatest profit. This will provide the society with more and better goods and services at the lowest prices. To explain why all societies benefits when the economy is free of regulations, Smith used the metaphor of the “invisible hand.”

The “invisible hand” was Smith’s name for the economic forces that today would call supply and demand, or the marketplace. Thus, Smith agreed with the physiocrats, and their policy of “lassez-faire”, which let individuals and businesses function without government regulation. In that way the “invisible hand” was free to guide the economy and maximize production.

Ex. 14. Answer the questions.

1. What title did the book “The Wealth of Nation” earn Adam Smith?

2. Did Adam Smith support physiocrats or mercantilists?

3. What was a nation’s wealth dependent upon in Smith’s view?

4. Why would economy work best if left to function on its own?

5. What is the point of producing only those products that customers wanted?

6. What is meant by “invisible hand?”

7. In what way was “invisible hand” free to guide the economy?

II. Match the verbs on the left with the nouns on the right and use the phrases in the sentences of your own.




go to

deal with


apply for

be at


dismiss from







a shop


$ 500

income tax


a job

a position/post

a promotion

a vacancy

a visa


an application

III. Match the following nouns with the groups of adjectives.







a) full-time, hard, monotonous, manual, boring;

b) big, small

c) well-paid, badly-paid, dirty, dangerous

d) interesting, modern, prestigious

e) promising, diplomatic, academic

f) skillful, qualified, responsible, self-disciplined

IV. Match Russian and English equivalents.

1) work conditions

2) work experience

3) employment book

4) employment office

5) family income

6) income tax

7) application form

8) request application

9) retire

10) resume/ curriculum vitae(CV)

11) besacked/dismissed

a) доход семьи

b) заявление о приёме на работу

c) уйти на пенсию

d) быть уволенным

e) трудовая книжка

f) письменная просьба

g) трудовой стаж

h) служебная и личная характеристика

i) отдел кадров

j) условия труда

k) подоходный налог

V. Answer the questions using the active vocabulary.

  1. What are normal working hours for most office jobs in our country?

  2. Can you name three jobs that get very high salaries in our country?

  3. When you start paying income tax in our country, what is the minimum amount you have to pay?

  4. What jobs often involve shiftwork? (Give at least two examples.)

  5. Is flexitime common in our country?

VI. Job hunting is not easy nowadays. Read the text and say what problems Arthur had while looking for a job. Looking for a Job

As Arthur was coming to the end of his course at the Earl Court Polytechnic, he began to wonder what he would be doing after it was all over. During the weekends of the summer term he would sit in his flat going through the job columns of the Observer and the Sunday Times looking at the possible openings in industry or commerce that might start him on the road to becoming a tycoon. First he might start modestly as a trainee in management, then go on to become a junior executive and then end up as a man with a plum job with a company car, an expense account and all the perks of a high-powered job. He would imagine himself sitting in the back of a long chauffeur-driven car either issuing instructions to his subordinates over the car telephone or dictating letters and memoranda into a dictating machine. Or he would be sitting at an impressive leather-topped mahogany desk with three telephones, an expensive carpet on the floor, and a pretty secretary sitting opposite him, pencil poised waiting to take down that important directive that would affect the lives of millions. Or again he would be flying to New York on his way to an important international trade conference. His fantasies were endless.

The realities of the situation were, however, somewhat different. He was at that moment an averagely impoverished student living partly on his young wife’s earnings with just about enough to pay the rent, rates and fuel bills and to eat modestly – at least until his course finished at the end of the following month when his student days would come to an end.

He had already filled in at least fifteen application forms, written as many letters of application and had received back six postcards informing him politely that the post he had applied for had already been filled. Another seven had been written saying that his communication was acknowledged and would be receiving attention in due course. The rest of his efforts had met with no response whatsoever. He was beginning to feel that if he were a little younger he might stand a better chance.

So despite Arthur’s fantasies he was not feeling especially confident when he started to write a letter to a firm called Robinson’s Electronics who were advertising for a management trainee to start in September at their headquarters in North London.

3.Match the words on the left with the correct definition on the right.

software helps to keep track of all the files in a project

New Project dialog the information processed by a computer

Project Explorer the window which helps to select the type of project which should be


Project file the programs and data used in a computer

project to find and fix the faults in a program or system

data the group of all the files which make up a program

debug information about all files in the program

4. Answer the questions.

1.What is the main function of a project?

2.What are the stages of creating a Visual Basic program?

3. What is called a project in Visual Basic?

4. Why can’t a computer sometimes do anything?

5. What does the Project Explorer allow?

6. How can new files be added to a project?

7. What can be used to keep track of multiple forms?

4. Tell your ideas of the following:

What do you think of advantages and disadvantages of Visual Basic, Virtual Pascal and Visual FoxPro?


1. Read the text, try to understand it. A Brief History of the Java Language

The Java language is the fastest growing programming language in computing history. Its exponential growth parallels the growth of the Internet for which it was designed. But, Java technology is much more than just a new language.

In late 1990, Sun Microsystems, Inc., a manufacturer of high-end Unix work stations, initiated a project code-named “Oak”.

The goal was to design a technology that could integrate electronic devices with other computing devices using a standard programming language via the Internet.

Discouraged by the complexity and unreliability of the C++ language, James Gosling set out in June of 1991 to create an “Oak” interpreter—a simple, reliable, object-oriented (OO) language. Today, Gosling is considered the “ Father of the Java language”. Originally, the Java compiler was written in the C language. As proof of the viability of the Java language, the compiler was rewritten in the Java language in 1994. In May of 1995, Sun formally announced the Java language. Therefore, May 23, 1995 is considered Lava’s “birthday”. In short order, all the major software manufacturers licensed Java technology.

The first major use of Java technology on the Internet was the use of applets. An applet is a Java application which is run under the control of a browser inside an HTML Web page. Virtually, everyone with a Web site added an applet to perform special text or graphics effects, which enlivened otherwise boring, static Web pages.

Next, stand-alone Java applications began to appear. But by far the most widespread use of Java technology is in server-side applications, using JavaServer Pages (JSP), Enterprise JavaBeans (EJBs), and Java servlets.

Design Goals of Java Technology

The success of Java technology, and the genius of Gosling, is due to its design.

Simplicity – The syntax of the Java language is similar to those of C and C++. Therefore, it is both familiar to and easily learned by C and C++ programmers.

However, features of those languages that contribute to programming errors – like pointers, memory management, and multiple inheritance – were changed.

Object Orientation (OO) – The Java language is based on the modern object programming paradigm in which things are objects and verbs are methods (functions).

Architecture Independence – Java applications are compiled into an intermediate language called byte code, which is executed by an interpreter called a Java Virtual Machine (JVM). Theoretically, a compiled Java application can run on any hardware which hosts either a JVM or a Java Just-In-Time (JIT) compiler. Thus, Java applications are portable; that is, a Java application can be distributed as compiled binaries that will run on any Java platform. However, it is possible to write non-portable code by accessing platform – specific features.

Networking – The Java language is the first programming language to incorporate networking from the beginning. Therefore, it is as easy to read a file over the Internet as it is to read a local, disk file.

Distributed Architecture – A Java application can be written to run across multiple Web servers, loading classes and creating objects dynamically as needed.

Security – Java technology has built-in security management. All potentially dangerous methods ( for example, deleting a file) must first ask the Security Manager whether the action is permitted. This level of security is critical to applications that are downloaded over the Web.

Java Technology Components

Java technology comprises three major components – the Java programming language, the Java interpreter or Java Virtual Machine (JVM), and the Java platform.

The Java programming language is a state-of-the-art, object – oriented language.

Its syntax is like that of the C language. It is easily learned, extremely powerful, and prohibits many types of programming errors.

The Java Virtual Machine (JVM), or Java interpreter, executes the compiled Java applications. One or more JVMs are available for every major computing platform. Sun Microsystems distributes free JVMs for its proprietary Solaris systems and for Windows platforms. JVMs are, also, available for Linux, MacOS, and Unix platforms.

The Java platform consists of a set of predefined classes organized into packages which are extensions to the basic Java language. These packages provide graphics, graphical user interface (GUI), input/output, networking, and security. While the Java language proper seldom changes, the platform changes with every new release.

Java Technology vs. C++

The Java language is often considered to be a descendent of the C++ language. Some wags call the Java language “C++--++”, meaning that the Java language consists of C++ minus some troublesome features plus some new features.

C++ is compiled to machine language, making it non- portable in that it must be recompiled on every target platform.

On the other hand, compiled Java code can be run on any Java platform without recompilation.

C++ uses pointers to refer to memory locations. Pointers can be directly manipulated by C++ programmers, often resulting in catastrophic programming errors. Java references, on the other hand, cannot be used in pointer arithmetic, effectively eliminating an entire class of errors in C and C++ programs.

C++ requires the programmer to manage memory by allocating and deallocating chunks of memory for program use. Java technology handles memory management automatically.

Early on, C++ programs were faster than Java applications; because, whereas C++ is compiled to machine language, Java applications run on a software interpreter or virtual machine.

The words to the text:

exponentialэкспоненциальный, показательный


to initiate начинать

goal цель



tosetoutнамереваться, собираться




toperformделать, создавать

toenlivenоживлять, разнообразить



tocontributeспособствовать, содействовать

inheritanceунаследование (свойств), последствие



todistributeраспределять, распространять

binaryдвойной, двоичный








to refer ссылаться

to eliminate устранять, исключать

entire весь, целый

Ex. 6. Match the verbs on the left with the nouns on the right.


to organize to carry out to offer to develop to fulfill to satisfy to produce to give to pay to get to provide a. basic needs b. Marketing Mix c. a profit d. a bad reputation e. a price f. a product g. a certain image h. benefits i. a company j. market research k. a want


Ex. 7. Give the English equivalents to the following words and word-combinations.


предпринимать шаги _________________________________________________

ставить во главу угла покупателя _______________________________________

компании, ориентированные на рынок ___________________________________

изучать привычки потребителей ________________________________________

симпатии и антипатии _________________________________________________

определять цену и место продажи _______________________________________

товары конкурентов ___________________________________________________

служить долгое время _________________________________________________

товар надлежащего качество ____________________________________________

доставлять удовольствие _______________________________________________

соответствовать стандарту ______________________________________________



Ex. 8. Fill in the gaps with the suitable prepositions.


1. Other products, like a refrigerator, ______ addition ______ keeping food cool, would be

expected to be reliableand last _______a long time.

2. Products are usually grouped ________ the following types.

3. Producing the right product _____ the right price is an important part ____ the marketing mix.

4. The product also needs to be _______the right quality.

5. The product must be available ___________the right channels _______ distribution.

6. Place is a means _____ getting the product __________ the consumer’s hands.

7. Producer goods are bought to help __________ the production process.

8. We can do this _______offering the right Marketing Mix.

Ex. 9. Translate the words and phrases given in brackets.


1. Having selected the target market, the firm must (предпринять шаги) to satisfy the

consumer’s need.

2. Promotion is (средства общения) between the seller and buyer.

3. Some businesses (ориентируются на производство товаров).

4. (Сам по себе продукт) is probably the most important element in the marketing mix.

5. (После определения сегмента рынка) for the product, the other parts of the marketing mix

will be determined.

6. Consumers buy products (ради удовольствия), satisfaction or benefitsthey provide.

7. An expensive perfume (придаст определенный образ) to the consumer when they used it.

8. (Кроме товаров), services are also sold to consumers and to other producers.

9. Producer goods are bought to help with (производственный процесс).

10. If the product is not reliable and breaks down then it will get a bad reputation and (скорее

всего, будет плохо продаваться).





Ex. 10. Choose the correct box for each product.

Product Consumer good Consumer service Producer good Producer service
Tube of toothpaste        
Bottle filling machine        
Bank accounts        
A pair of sports shoes        
A chocolate bar        
Doctors treatment of a patient        
Office cleaning        
Factory building        
Purchase of a hospital bed        
Television programme        


Ex. 11. Put the questions to the words and word-combinations in italics.


1. The product itself is probably the most important element in the marketing mix

2. They spend a lot of money researching consumers’ buying habits, their likes and dislikes, to

see if they can design a product which people will want to buy.

3. Consumers buy products for the pleasure, satisfaction or benefits they provide.

4. Some products are sold to consumers.

5. Consumer goods can be goods that do not last long.

6. They are bought to help with the production process.

7. Producing the right product at the right price is an important part of the marketing mix.

8. A product has to last a reasonable length of time.

9. Having selected the target market, the firm must take steps to satisfy the consumer’s need.

10. The four P’s are the elements of the marketing mix.

Ex. 12. Say if the sentences are true or false. Correct the false ones.


1. Price is the most important element in the marketing mix.

2. Today most companies are product-orientated when developing new products.

3. The important thing about the product is that it must fulfill a want.

4. The satisfaction given to consumers doesn’t differ: all the products are bought to satisfy only

the basic needs.

5. In addition to goods, services are also sold to consumers and to other producers.

6. Consumer goods are produced for other businesses to use.

7. Lorries, machinery or components are examples of producer goods.

8. The product needs to satisfy consumer wants and needs.

9. Design of the product is of minor importance.

10. Reputation of the product doesn’t depend upon its reliability.



Text 3

The role of price in the marketing mix



credit terms – условия кредита

delivery – поставка, доставка

to cover expenses -покрывать расходы

a fair profit – справедливая прибыль

merchandise – товар

fair trade laws – законодательство против недобросовестной конкуренции

to make agreement– заключать соглашение, договариваться

to retail – продавать в розницу

to recognize the price –узнавать цену

clientele – клиентура

overall demand – общий спрос

novelties – новинки

mark-up – наценка

mark-down -скидка

to multiply - умножать

to fit in - приспосабливаться


All products and all services have prices. The price depends on different things such as credit terms, delivery, guarantees, quality and other forms of service; which price can produce the biggest profit during a long period of time. It's hardly possible to determine such a price.

When a business owner decides what price to charge for different goods and services, some kind of method should be used. By poor pricing the owner may lose his customers and profits. Two basic questions must be answered: 1) Are prices high enough to cover expenses and assure a fair profit. 2) Are prices low enough to meet the competition and attract customers?

Prices can be determined in different ways. For example, the prices of meat, cotton and other agricultural products can be decided in large central markets where forces of supply and demand exist. The prices on industrial products (iron, steel, etc.) are usually decided by large companies. Prices can also be set by the government, usually for different public services – railroads, electricity, gas, bus services, etc.

To understand how price is arrived at, we must first understand the concept of supply and demand. Supply and demand analysis explain how prices are established in market through competition among buyers and sellers and how those prices affect quantities traded. These questioned have already been examined in Unit “Economic Laws”. Now we’ll study what other factors may influence the price any firm can charge for its merchandise.

Factors affecting prices:

1. Fair trade laws. They still exist in many states. These laws allow the manufactures to make agreements with dealers who retail the product on the price at which it can be sold to the public.

2. Competitor prices on similar products with similar quantity must be recognized when active competition exists between firms.

3. Market strategy is a policy of setting prices and quality when a special clientele is served. For example rich people want special services and special merchandise, they are willing to pay for them. In this case their buying habits can be reflected in price policy.

4. The nature of overall demand is also considered in setting individual prices. Special goods, such as luxuries and style items carry higher prices.

5. Manufacturers’ suggested prices are designed by the manufacturers to protect the quality image of their products. Price policy is significantly affected by the type of a product. Noveltiesor special-interest items normally carry higher mark-ups.

6. Markup.The term markup refers to the amount which a business owner adds to the cost of an item in order to arrive at a selling price. The selling price may be expressed in a simple formula: cost price plus markup equals selling price.

Cost price + mark up = selling price

$1.00 $0.50 $1.50

7. Markdown (discount) is simply an amount or percentage cut from the original selling price. For example, if men’s shirts are not selling at $16.95, they might sell for $14.95. The dollar value of the markdown is $2.00 and the percentage is 11.8%.

In theory, for every dollar a customer pays for a product, the seller should know how much is clear profit, how much goes for merchandise, and how much goes for expenses (rent, heat, light, wages, insurance, advertising). Of course, a merchant does not actually analyze every dollar. But when $1 is multiplied by 10.000 at the end of a six month business period, the effects are important.

When deciding a price for an existing product or a new product, the business must be very careful to choose a price which will fit in with the rest of the marketing mix for the product. For example, if a new product is of high quality, is to be aimed at consumers who have a lot of money, has luxurious packaging but has a low price, consumers will not think it is a good quality product and will not buy it. Some products are sold in very competitive markets and prices will have to be set near to their competitors prices. Other products are the only ones available in their market and so consumers may be willing to pay a high price to have one of these products.



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