VII. Translate the sentences paying attention to modal verbs and their equivalents.

1. They must pay careful attention to costs because the total amount of cost reduces the firm’s profits.

2. It was clear that the firm would have to cut down costs.

3. These examples must reckon with competition from other industries.

4. Firms should decide how much of a good to produce and sell.

5. The goods that ought to be produced are in great demand.

6. The program was to ensure rapid economic growth.

7. Supply has to depend upon incremental or marginal cost.

VIII. Write down the forms of the irregular verbs.

To overcome, to bring, to sit, to write, to say, to cost, to deal, to understand,

to get, to choose.

IX. Write down sentences with the following idioms.

1. To cost an arm and a leg — стоить целое состояние, огромных денег

2. Let no grass grow under one’s feet. Не откладывая дела в долгий ящик.

UNIT 4

PRICE

I. Read and translate the text.

Price, Quantity, and Total Revenue

Let’s say that a firm finds itself in possession of a complete monopoly in industry. The firm might be the fortunate owner of a patent for a new anticancer drug, or it might have an exclusive franchise to sell a service like cable television. If the monopolist - entrepreneur wishes to maximize its profits, what price should it change? What output level should it produce? To answer these questions, we need to compare the costs of production with the revenues from production. More precisely, we need to calculate the change in profits that occurs when production increases; we will see that this calculation is made by comparing the marginal cost of additional output with the marginal revenue of additional sales.

Pricing – the Intractable Problem

There are perhaps few decisions new entrepreneurs have to take when they feel more unsure of themselves than when they are trying to set the price for their new product or service. For many, what they fear most is that they will set the price too high and inhibit sales. Without a logical approach to pricing, many simply delegate the job to their accountants. Others simply set their price slightly below what they think is the “going rate” or market price. This is not a good way of using a marketing tool, especially, when considerable care has been devoted to the design of the product and to studying the market. This preoccupation with avoiding a price that is too high often results in a price that is too low, and this can be equally damaging.

If you discover later on that you have set your price too low, it is often very difficult to adjust it upwards once your product or service and its price have become known. Dropping a price or not increasing it in line with inflation is much easier.

Customers are often very suspicious of new products or new services offered at a price lower than those of existing products. The price you affix to your product or service is, in many ways, a signal to the market of the value you place on your product.