Exam 14: Pricing Concepts for Establishing Value

If the fixed costs of manufacturing a new cell phone are $10,000,the sales price is $60,and variable cost per unit is $20,the break-even point is

Small-business consultants are constantly admonishing would-be entrepreneurs,"Beware of the overhead." Using an overhead of $100,000 and then an overhead of $200,000,with a contribution per unit of $50,determine the break-even points.

Traditional demand curve economic theory is used by marketers to understand _______ in the five Cs of pricing.

Fenton has always used standard markups to determine the prices for his clothing products.You are advising him to change his pricing strategy.What advice would you give Fenton?

How is consumer behavior affected by the "income effect"?

If upscale manufacturers of prestige products like BMW autos,Tiffany glass,or Rolex watches offered lower-priced products,what might happen to the demand for their products? Why?

Natalie operates on a pretty tight budget.She is a price-conscious shopper and usually buys store or generic brands to save money.Recently,however,Natalie was given a pretty substantial raise.As such,she has altered her shopping patterns and now regularly buys more expensive,name-brand goods.This is an example of

Which of the following is not one of the five Cs of pricing?

Barry customizes Harley-Davidson motorcycles.No two cycles are alike.He notices that very few customers even ask the price of his motorcycles before they decide to purchase them.Demand for his motorcycles is probably

Bernard's firm has set corporate direction to become one of the leaders in each of its significant market segments.It was Bernard's job to examine the firm's pricing strategy to determine how to maximize market share,even at the expense of profits in the short run.What kind of company objective would guide Bernard's effort?

Assume the demand for electricity,a necessity with few substitutes,is -0.2.If the electric company raised its rates by 10 percent,we would expect

In developing marketing strategies,why is price often the most challenging of the four Ps to manage?

The full price of a product or service includes all of the following except

When Ursula decides how to price new products in her gift store,she measures the value of her product offerings against those of the other stores in her area.Ursula uses a _______ pricing strategy.

The commercial airline industry is considered what type of market?

Marketers spend millions of dollars annually trying to create or reinforce brand loyalty.Brand loyalty changes the demand curve for the firm's products by

Variable costs change with

Jacob rents rooms in his hotel for an average of $100 per night.The variable cost per rented room is $20,to cover maid service and utilities.His fixed costs are $100,000 and his profit last year was $20,000.For Jacob,the contribution per unit is

The _______ is the ratio of the percentage change in quantity demanded to the percentage change in price.

Differentiate between the four levels of competition and offer examples of each type.