Exam 11: Pricing Products and Services

To promote their business, some psychics advertise free tarot-card readings and other insights into their customers' futures on television. Unfortunately, this "free reading" has cost some unsuspecting callers as much as $700 in phone charges. This sort of pricing practice would be primarily monitored by the

Assuming there is no change in a product's price or the quantity demanded, if a business owner wants to increase her advertising expenses to $500 monthly, this would cause total costs to ________ and the break-even quantity to ________.

Seasonal discounts are used by manufacturers to

Bundle pricing refers to

Skimming pricing refers to

With a cost-oriented pricing strategy, a price setter stresses the ________ side of the pricing problem and the price is set by looking at ________.

Three different objectives relate to a firm's profit, which have different implications for pricing strategy. The three profit-oriented objectives include ________, managing current profit, and achieving a target return.

According to the price equation, final price equals list price minus ________ plus extra fees.

Which of the following statements is most accurate?

A skimming pricing policy is likely to be most effective when

All of the following are profit-oriented approaches to select an approximate price level except which?

It costs Lady Marion Seafood, Inc., $30 to catch, process, freeze, package, and ship five-pound packages of Alaskan salmon. The firm adds 60 percent to the cost of its salmon products and charges customers a total of $48 for a postage-paid, vacuum-sealed package. What type of pricing does Lady Marion Seafood use?

During the iPad's ________ stage of its product life cycle, Apple had great latitude in setting a price for the product because of a lack of competition.

If a firm's profit is high enough for it to remain in business, a pricing objective may be to ________, which will in turn may lead to increases in market share and profit.

Setting the highest initial price that customers who really desire the product are willing to pay when introducing a new or innovative product is referred to as

Figure 11-7 -Figure 11-7 above depicts a

Tim Marlow, the owner of The Clock Works, wanted to know how many clocks he must sell in order to cover his fixed cost at a given price. Marlow knew that he had total fixed costs of $20,000 for equipment, taxes, and a bank loan. He also had a unit variable cost of $20 per clock for labor and materials. If the price Marlow charges for each of his clocks is $40, what is his break-even point quantity?

Hormel offers its food distributors a discount of 15 percent for payment within 10 days on orders of all Jiffy brand products. Hormel is giving its customers a

Figure 11-6a -In the break-even chart in Figure 11-7a above, the triangular area GAF represents the firm's

While pricing objectives frequently reflect corporate goals, pricing constraints often relate to