Other Factors Affecting Price Sometimes there are factors other than the cost of doing business and profit that affect price: Price = Cost of Doing Business + Profit

1. Laws The Canadian Competition Act was created to stop unfair pricing.

i. Price Fixing A group of business collaborating to set a price for a specific product. Illegal! Example:

ii. Retail Price Maintenance A company tells another independent company what price to sell an item for Illegal! Example: MSRP $24,975

Deceptive Pricing Tactics Other Illegal pricing strategies that benefit retail businesses but harm customers

iii. Double Ticketing Putting 2 prices on an item and charging the customer the higher price. Illegal! Stores must charge the lowest ticketed price. Example:

iv. Bait and Switch Advertising a low-priced product but then trying to persuade customers to buy a higher priced one Example: $2,999 $4,999

v. False Sale Prices Marking prices up and then putting them “on sale” so that customers feel they are getting deal Example: