Exam 19: Pricing Concepts

At a price of $1,192,057,the Bugatti Veyron may be the most expensive street legal car currently on the market today.Obviously,Bugatti is NOT using a _____ pricing objective in setting the price for this car.

Specialty Cakes Imagine you're planning an after-symphony fund-raising party,and you need a life-size grand piano cake.Or,you are a developer proposing a new shopping center to a group of investors,and you want to serve a cake shaped like an architectural rendition of the center.Is this impossible? No,you just need to contact Cecilia Villaveces Cakes.She actually built a life-size grand piano for a gala in Macon,Georgia.You can expect to pay anywhere from $75 to $10,000 for one of Cecilia's artistic creations,depending on complexity of design and size.She uses only the best ingredients,and no two cakes are ever quite alike. -Refer to Specialty Cakes.Which of the following is the BEST example of a variable cost for Cecilia Villaveces Cakes?

The _____ is the quantity of a product that will be sold in the market at various prices for a specified time period,and _____ is the quantity of a product that will be offered to the market by suppliers at various prices for a specified period.

Dixie Furniture Company has recently moved to a new,larger location.At this new location,it has been unable to attract sufficient customers.Its owner does not have the cash to pay the current loan installment due on the building and inventory so he decided to reduce all merchandise prices by at least 50 percent for a weekend sale to earn enough to make his loan payment.His pricing objective can be classified as:

_____ is the extra revenue associated with selling an additional unit of output.

Your Memory Lane creates custom art prints that use graphs and icons in a street scene to commemorate special occasions.Suppose Your Memory Lane has priced its product at $350 per print.Further,it has determined that the company's fixed cost is $12,500,with an average variable costs per print of $250.What is his fixed cost contribution per print?

Pet's Eye View Digital Camera is a small,durable digital camera that pet owners can clip to their pets' collars.A programmable timer takes pictures every few minutes,recording a photographic diary of the pet's day.The camera sells for $25.The average variable cost for each camera is $10 and the total annual fixed costs for plant operation are $45,000.What is the break-even point in units?

The typical break-even model assumes a given fixed cost and a:

Specialty Cakes Imagine you're planning an after-symphony fund-raising party,and you need a life-size grand piano cake.Or,you are a developer proposing a new shopping center to a group of investors,and you want to serve a cake shaped like an architectural rendition of the center.Is this impossible? No,you just need to contact Cecilia Villaveces Cakes.She actually built a life-size grand piano for a gala in Macon,Georgia.You can expect to pay anywhere from $75 to $10,000 for one of Cecilia's artistic creations,depending on complexity of design and size.She uses only the best ingredients,and no two cakes are ever quite alike. -Refer to Specialty Cakes.There are many occasions for which people may need to buy a cake,but most people do not have the time or interest to learn about cakes and their bakers.These people who do not know about the quality of the Cecilia Villaveces Cakes might choose them because they:

The dimensions of quality that are important to consumers include:

When a retailer offers a price-matching guarantee,it is signaling to the target market that it is positioned as a low-price dealer.

Research on 1,500 car purchases found that the Internet lowers prices for two distinct reasons.Identify and discuss each.

A firm has maximized its profits when its marginal revenue exceeds its marginal cost.

Target return on investment is the most common profit objective used by firms.

Tesla Motors "Going green" doesn't have to be boring.The Tesla Roadster Sport is an electric car that goes from 0 to 60 in four seconds and drives more like a race car than an environmentally-friendly ride.But that level of performance will set you back $128,500.As of 2009,Silicon Valley-based Tesla Motors,Inc.was the only company offering highway-compatible electric cars.Most Roadster Sport buyers are car enthusiasts and are buying them for the "fun toy" aspect of having an electric car rather than for environmental reasons. -Refer to Tesla Motors.Tesla set the price of the Roadster high because the company wanted to promote a high-quality image.What type of pricing does this represent?

As a short-term pricing objective,_____ can be effectively used on a temporary basis to sell off excessive inventory.

David likes New Balance running shoes.However,when he stopped by the Foot Locker to buy a new pair of running shoes he notice that Nike had a new pair of running shoes that cost $350.To David the higher price of the Nike shoe indicated that it would be a better pair of running shoes.This is an example of:

Most demand curves slope:

An office supply store can buy a desk for $300.If the store owner sells the desk for $450,what is the markup based on the selling price?

Monthly output at Leisure-Time,Inc.changed from 12 to 13 prefabricated gazebos,and the total costs changed from $9,000 to $10,500.What is the marginal cost for this company?