Exam 19: Pricing Concepts

David likes New Balance running shoes.However,when he stopped by the Foot Locker to buy a new pair of running shoes,he noticed 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:

If a shopping bot steers you to an exceptionally low price,you should suspect Internet fraud.

At Walmart,Randi saw a bag of daffodil flower bulbs and a box of plant fertilizer.The items,which were sold together,retailed at $28.50 but were marked down to $19.99.The retailer sold one at the $28.50 price and five at the $19.99 price.The retailer's revenue is:

Fixed cost contribution equals:

Kroger supermarkets will place well-known brands on the shelves at high prices while offering their own Kroger brand at lower prices.This practice is an example of:

Bottles of Pure Hawaiian Air contain air that smells like the floral bouquet that greets tourists as they get off the plane in Hawaii.When a tourist shop began selling Pure Hawaiian Air,it charged $5 per bottle and could not keep up with the demand.It has since raised the price to $7.Now the shop is still selling all the bottles of Pure Hawaiian Air it carries,but the owner is not forced to reorder on a daily basis.The $7 price is probably a(n):

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

_____ cost is the change in total costs associated with a one-unit change in output.

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

Research has shown that products perceived to be of high quality tend to benefit less from price promotions than products perceived to be of lower quality.

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.What is the fixed cost contribution for the Roadster given average variable costs of $50,500?

Calculate answers for the following scenarios if retailer markups are based on their selling price: a.A retailer sells a set of measuring cups for $2.50 after adding $0.50 to the original cost.What is the markup percentage? b.The cost of a food blender for the retailer is $40 and the retailer applies a markup of $60.What is the retail markup percentage? c.A retailer marks up all products by 20 percent.If a set of glasses costs the retailer $10,what will be the final selling price? d.A retailer marks up all products by 75 percent.If the selling price of a set of plastic bowls is $4,what was the cost to the retailer?

Smelly Fruit At first glance,there is little to like about the durian.The durian is a fruit popular in Thailand that is spiky outside and stinky on the inside.When confronted with the durian for the first time,the Wall Street Journal recently reported that westerners often describe its distinctive sulphurous smell with words like stinky socks and manure.However,the durian is so popular in Thailand that one variety of the durian fruit,called the Kan Yao,has been selling for as high as $200.Even at that price,supply of the Kan Yao cannot keep up with demand.There are approximately 30 varieties of the durian grown in Thailand,with the most plentiful selling in the $15 range.The yellow flesh of the durian,the part you eat,has very powerful smell but possesses a sweet,nutty taste that Thais cannot seem to get enough of at any price. -Refer to Smelly Fruit.The durian fruit is a unique product.To many people in Thailand,no other fruit tastes or smells anything like the durian.Its uniqueness,in the eyes of the customer,would tend to have which of the following?

Specialty Cakes Imagine that 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:

Market saturation in the online deal industry would certainly affect the prices of goods and services.This is because it would __________.

The point at which marginal cost and marginal revenue are equal always results in:

Pierre's Ice Cream Company produces ultra-rich ice cream,which it sells in the Cleveland,Ohio,area.Last year,it managed to exceed its target return on investment (ROI)for the current fiscal year.The following results were found on its financial statements: What was the actual ROI for Peirre's Ice Cream Company?

Today's firms must develop specific,measurable,and attainable pricing objectives if they hope to survive in highly competitive markets.

Specialty Cakes Imagine that 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 fixed cost for Cecilia Villaveces Cakes?

Which of the following statements describes an advantage of status quo pricing?