Input in this sector is relatively small, second sawa intends to conduct a competitive pricing policy with

(4) . That means that the (5) is

expected to be round $55, with the (6) being

around 33% of that.

RICHARD: I see, such a low price may have the effect of creating a (7) in the computer games mar- ket.

JAMES: As far as I can judge aggressive pricing is a new pol- icy for SAWA, as the company aims to increase its (8) in the lower end of the games market.

RICHARD: Well, keep me informed of the news about Eagle.

9* Before you listen to Dialogue No 2 use Glossary to choose the best definition for each of the expressions below.

1. cost of production

1. Selling price for a finished product

2. all expenses for raw materials, heating, lighting, electricity, etc.

3. all costs involved in making a product ready for distribution and sale

2. cost of sales

1. total costs involved in making a product or service, distributing it and selling it

2. cost of selling a product in salaries, commis­sions, etc.

3. the price of a product when it is sold

3. selling costs

1. the total money raised selling a product or service

2. the costs involved in distributing, promoting and selling a product

3. the salaries and other expenses paid to the sales representatives

4. fixed costs

1. prices established by the government

2. costs which are decided by the management of a manufacturing company, not by suppli­ers or retailers

3. costs which do not depend on quantity of pro­duction, e.g. heating, lighting, rent

5. variable costs

1. costs which change according to the quantity of production, such as raw materials, compo­nents, overtime pay, etc.

2. costs which are difficult to estimate as they may suddenly change because of changes in the market, such as competitors' pricing

3. costs which change according to the time of the year, e.g. warm clothes for winter, or summer fashions

6. overheads

1. regular costs associated with the day-to day running of a company

2. additional expenses because of a higher than expected demand for products

3. extra costs above what was planned in the costs budget

6. unit cost

1. the costs associated with all production of all products

2. the cost involved in making one single exam­ple of a product

3. the total costs for any one part of a factory producing one type of product

6. cost of labour

1. cost of all work involved in making a product or service ready for sale

2. cost of manual workers employed by a compa­ny

3. cost of industrial action by employees

10* Listen to Dialogue No 2 between two speakers and say if the statements below are true or false. Then listen again and check your answers.

1. Production costs are the expenses a manufacturer has to pay for labour.

2. The amount of money necessary to produce one individ­ual example of a product is the unit cost.

3. Variable costs do not depend on the changes in the out­put of production.

4. The day-to-day costs of running a business are called overheads.

5. Fixed costs are usually associated with cost of labour and cost of sales.

Unit 3. READING COMPREHENSION