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Financial Literacy Club

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Entrepreneurship · Lesson 4

Pricing

Part A. Guided notes

Fill in each blank using the word bank.

Word bank: ceiling · customers · founder · profitable

  1. Cost = floor. Value = .
  2. Value-based pricing is usually most .
  3. Underpricing is a common mistake.
  4. Options (premium, rush, bundles) let pay for what they value.

Part B. Check your understanding

Circle the best answer.

  1. Your product costs $8 to make, and you sell it for $7 to attract customers.

    1. What happens as you sell more?

    • A. You make more money.
    • B. You lose $1 on every sale, so more sales mean bigger losses.
    • C. You break even.
    • D. Costs disappear at high volume.

  2. 2. What usually sets the ceiling on what you can charge?

    • A. Your costs
    • B. Your favorite number
    • C. How much the solution is worth to customers
    • D. How much time you spent on it

  3. 3. Charging very low prices is always the best way for a new business to succeed.

    True/False

Part C. Apply it

Show your work.

  1. 1. An item costs $4 to make. What's the price with a 50% cost-plus markup?

  2. 2. Why is underpricing risky for a new business?

Part D. Think about it

Answer in complete sentences.

  1. 1. Think of something you paid more for than it cost to make. Why was it worth it to you?

  2. 2. Why is it hard to raise prices after launching?

Exit ticket

Name

Fill in: Cost is the ___ for a price; value is the ___.