APPLIED ECONOMICS

Name of Learner:____________________________ Grade Level: ___________________

Section: ____________________________________ Date: ________________________

LEARNING ACTIVITY SHEET

Background Information for Learners

This lesson will focus on pricing concepts and objectives. It will explain what are the
implication of market pricing and the effect of this pricing in making economic decision.

A company earns revenues by charging a price from buyers.

Price is the value that the company expects to get from customers in return for the
product or the service the company is providing to the customer.

Pricing is the method of determining the value a producer will get in the exchange of
goods and services. Simply, pricing method is used to set the price of producer’s offerings
relevant to both the producer and the customer.

Five factors to consider when pricing products or services:

• Nature of the product/service.

• The price of similar product/service in the market.

• Target audience i.e. for whom the product is manufactured (high, medium or lower
class)

• The cost of production viz. Labor cost, raw material cost, machinery cost, inventory
cost, transit cost, etc.

• External factors such as Economy, Government policies, Legal issues, etc.

Pricing Objectives

The objective once set gives the path to the business i.e. in which direction to go. The
following are the pricing objectives that clears the purpose for which the business exists:

1. Survival: The foremost pricing objective of any firm is to set the price that is
optimum and help the product or service to survive in the market. The survival
should be the short - term objective once the firm gets a hold in the market it must
strive for the additional profits.
 2. Maximizing the current profits: Many firms try to maximize their current profits by
estimating the Demand and Supply of goods and services in the market.

Seasonal supply and demand of goods and services are the best examples that can be
quoted here. Examples are Christmas decoration, fruitcakes, Christmas trees, and
candle.

3. Capturing huge market share: Many firms charge low prices for their offerings to
capture greater market share. The reason for keeping the price low is to have an
increased sales resulting from the Economies of Scale.

4. Market Skimming: means charging a high price for the product and services offered
by the firms which are innovative and uses modern technology. The prices are
comparatively kept high due to the high cost of production incurred because of
modern technology.

5. Product –Quality Leadership: Many firms keep the price of their goods and services
in accordance with the quality perceived by the customers.

Learning Competency with code

Determine the implications of market pricing on economic decision-making

ABM_AE12-Ie-h-5 ; ABM_AE12-Ie-h-6

Activity 1: Fact or Bluff!

Direction: Read each statement carefully, write ( F ) if the statement is true and ( B ) if
the statement is false.

__________1. Pricing is the method of determining the value a producer will get in the
exchange of goods and services.

_________ 2. Price is the value that the customers can expects to get from company in return
for the product or the service the company is providing to the customer.

_________ 3. Survival should be the long - term objective once the firm gets a hold in the
market it must strive for the additional profits.

_________4. A company earns revenues by charging a price from buyers.

_________5. Many firms keep the price of their goods and services in accordance with the
quality perceived by the customers.
Activity 2: Price Tag!

Direction: Determine the price range of the following essential commodities in time of
the pandemic that are frequently bought by the customers. Search on the internet the
suggested retail price from the Department of Trade and Industry (DTI) and the retail
price prevailing in the market today. Write them on the space provided for specific
product.

Note: Do not consider the product brand.

Essential Commodities SRP ( DTI) RP ( Market – Supermarket, Pharmacy’s,

Drug stores, Online Store,
Sari – Sari Store)

1.FaceMask

2.Face Shield

3.Alcohol

4.Germicidal /
Anti – bacterial Soap

Activity 3. Let’s Plan!

Direction: Considering the factors when pricing products or services, think of a product
that you can sell or services that you can provide. Write on the given space your
answers.

Factors Product / Services

Product/ Services Name

Nature of the
product/service

Competitor/s

Competitor/s Price

Target Audience (Market)

Cost of Production

External Factors
Rubric: ( Activity 3)

Criteria 4 3 2 1 Score

Completeness All the Correctness All the Most of the space provided is correct and
space provided were information provided were accurate.
accomplished. provided is accomplished. Some of the space
correct and provided were
accurate. Most of the information accomplished.
Some of the information accurate. accomplishment No information provided
provided is correct and No

Congruency of Reflection: other. Some of the information.

All the Most of the information
information information information provided are
provided are provided are congruent to each
congruent to each congruent to each other.
other. No congruency of Total

Answer the following questions below, write your answer on a sheet of paper:

1.What did I learn?

2.Why does this learning matter?

3.In what ways will I use this learning?

References:

Tullao, Tereso. 2018. Applied Economics. Philippines: Phoenix Publishing House.

Dinio, Rosemary. et al , 2016. Applied Economics. Philippines: REX Publishing.

Answer Key: Submitted by: Activity 3

Activity I Accept all answer using the

rubric.
1, F GLENDA N. NAGUIT, PhD.
Master Teacher I
2.B ACNHS -SHS

3.B
Activity 2
4.F
Accept All Answer. Teacher
5.F must check the updated SRP
provided by the DTI from
the internet.