V. Answer the questions:

1. Does any producer have any control over the price of its product in a largely theoretical system of pure competition?

2. Why must all producers accept the equilibrium price?

3. What can you say about product differentiation? A. What is the idea (смысл) of such differentiation?

5. Will it help a firm to control price to any degree?

6. In what other way do firms try to control prices?

7. What is the result of effective advertising?

8. What is an oligopoly?

9. Why do few large sellers in oligopoly have considerable control over price?

10. Do firms in the real economy exert any control over prices in general?

11. What two types of competition do you know?

12. Do good service, branding, packaging and labeling really benefit (приносят пользу) consumers?

VI. Agree or disagree with these statements. Use the following phrases:

That,s wrong. Это неверно.

That's (quite) right. (Совершенно) верно.

That's not quite true Это не совсем соответ-

to the fact. ствует факту.

According to the text... Согласно тексту...

1. In a largely theoretical system of pure competition, any producer has control over the price of its product.

2. The products of various producers are indistinguishable from each other when a system of pure competition exists.

3. Product differentiation is the process of developing

and promoting similarities between one's product and all other products.

4. Firms also attempt to gain some control over price through advertising.

5. If the advertising is effective, it will may permit a firm to decrease the price at which it sells its particular product.

6. In a real market, firms may reduce prices to obtain a competitive edge.

7. Price competition occurs when a seller emphasizes the high price of a product and sets a price that equals or beats competitors' prices.

8. Price the competition allows a marketer to set prices based on demand for the product.

9. Nonprice competition is used most effectively when a seller makes its product stand out from the competition by distinctive product quality, customer service, promotion, packaging or other features.

VII. Speak on the following:

1. Prices in the real economy.

2. Price and nonprice competition.

8. Read and translate this additional text:

PRICING OBJECTIVES

Before management can set prices for a firm's products, it must decide what it expects to accomplish through pricing. That is, management must set pricing objectives that are in line with both organizational and marketing objectives.

Of course, one objective of pricing is to make a profit, but this may not be a firm's primary objective. One or more of the following factors may be just as important.

1. SURVIVAL

A firm may have to price its products to survive — either as an organization or as a factor in a particular market. This usually means that the firm will cut its price to attract customers, even if it then must operate at a loss. Of course, such a goal can't be pursued on a long-term basis. Consistent losses would cause the business to fail.

2. PROFIT MAXIMIZATION

Many firms may state that their goal is to maximize profit, but this goal is impossible to define (and thus impossible to achieve). What, exactly, is the «maximum» profit? How does a firm know when it has been reached? Firms that wish to set profit goals should express them as either specific money amounts or percentage increases over previous profits.

3. TARGET RETURN ON INVESTMENT

The return on investment (ROI) is the amount earned as a result of that investment. Some firms set an annual-percentage ROI as their pricing goal.

4. MARKET SHARE GOALS

A firm's market share is its proportion of total industry sales. Some firms attempt, through pricing, to maintain or increase their share of the market.

5. STATUS QUO PRICING

In pricing their products, some firms are guided by a desire to maintain the status quo. This is especially true in industries where price stability is important. If such a firm can maintain its profit or market share simply by charging about the same price as competitors for similar products — then it will do so.

VOCABULARY

pricing objective expect accomplish that is be in line objective pricing primary objective 1. survival either... or particular market cut a price operate at a loss goal can't be pursued long-term basis cause the business to fail 2. profit maximization state define thus achieve set profit goals express specific percentage increase previous 3. return on investment amount earn annual-percentage 4. market share maintain 5. status quo pricing be guided charge price it will do

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задача ценообразования надеяться, ожидать достигать то есть соответствовать задача, цель ценобразование основная цель выживание или... или конкретный рынок снизить цену работать с убытком цель зд. не может продолжаться долгосрочная основа привести предприя-тие к банкротству максимилизация прибыли утверждать определить таким образом достичь установить цели по достижению прибыли выражать конкретный процентное увеличение предыдущий прибыль на инвес-тированный капитал (денежная) сумма зарабатывать ежегодное процент-ное выражение рыночная доля; доля рынка поддерживать существующее ценообразование руководствоваться назначать цену зд. все будет в порядке