Exam 14: Pricing Concepts for Establishing Value

Raymond estimates that the fixed costs associated with opening a new bank branch are $500,000.He expects the branch to attract 1,000 new customer accounts in the first year,each of which will cost $50 per year to service.He also expects to generate $100,000 per year in revenue.For Raymond,the total cost of opening the new branch and remaining open for one year will be

David manages a Shoney's restaurant.He is considering staying open later in the evening.For David,the variable costs associated with staying open longer hours will include all of the following except

A _______ strategy involves accurately measuring all the factors needed to predict sales and profits at various price levels,so that the price level that produces the highest return can be chosen.

Julia wants her firm's gourmet snacks to be the leading brand in the U.S.market.When adopting a pricing strategy designed to gain market share,she should remember that

Brandon is conducting an experiment,charging different prices for the same products at different stores and measuring sales.With this information,he will construct a demand curve.How can Brandon use this information?

Price is the only part of the marketing mix that does not generate costs.

The point at which the number of units sold generates enough revenue to equal the total costs of running an operation is known as the

When a firm has a particular profit goal as its overriding concern,it will use target return pricing to meet the profit objective.

Break-even analysis is useful because it allows managers to

The contribution per unit is

Because there are only a few firms in markets with oligopolistic competition,

Because consumers are generally more sensitive to price increases than to price decreases,it is easier to lose current customers with a price increase than it is to gain new customers with a price decrease.

If a firm in a purely competitive market can differentiate its product or service,it becomes part of a(n)_______ market.

Which of the following is most likely to be characterized by pure competition in the United States?

If a firm is engaged in monopolistic competition,it should seek a way to differentiate itself.

Because there are many firms with similar products in purely competitive markets,

When it comes to measuring consumers' price sensitivity,products are viewed as either

In many high-end resort markets,Westin hotels compete directly with Crown Plaza hotels.When it comes to pricing,Westin tends to charge its guests similar rates to what the Crown Plaza hotels charge.Westin is using a _______ pricing strategy.

According to a typical demand curve,the higher the price,

Which of the following markets is most likely to be characterized by oligopolistic competition in the United States?