READ TEXTBOOK AND LECTURE NOTES 1. Cost is one consideration in setting a price. Name AND DEFINE the two types of costs that comprise total costs. (4 points) 2. When setting a price, a company will consider the prices of competitors who serve the same__.(1 point - Note: The answer is NOT product) 3. When a company and its competitors are selling similar products, explain when it is appropriate for a company to charge a higher price than its competitor. (3 points - Note: The answer is NOT "when using a premium pricing strategy." When can they get away with charging a higher price when product is similar? What did they do?) 4. Services have no inventory. If the seats on an airplane aren't filled, sales are lost. In contrast, a physical good could be sold on one day or the next day. It sits on the shelf until sold. So, since services have no inventory, how is pricing used to encourage demand for the product? (Consider restaurants and movies) (3 points) 5. What are the three basic functions performed by intermediaries? (3 points)