Exam 18: Pricing Concepts

What happens when demand is elastic?

The demand is the quantity of a product that will be sold in the market at various prices for a specified time period and the quantity of a product that will be offered to the market by suppliers at various prices for a specified period is referred to as which of the following?

What is a break-even point? The Catera Company makes and sells cotton candy machines.What is the break-even volume for Catera machines in units?

At the end of the summer,Howard Nursery reduced the price on all of its plants,fertilizer,and potting soil by 50 percent in order to liquidate this inventory.What type of pricing strategy is being used in this example?

Hippie High is a retail store that sells reproductions of clothes worn in the 1960s and the 1970s.The store's owner does not take into account competition when pricing the store's clothing.The markup on all items in the store is 100 percent over cost (or double the cost).What does Hippie High use?

Which of the following statements best describes the Internet?

Which of the following best describes when pricing is used as part of a promotion strategy?

A bakery supply catalogue sells five-pound bags of moist apricots and cranberries,sweet dates,bits of pineapple,and candied cherries to be used in fruitcakes.Each bag costs $24.95. -Refer to Dried Fruits.Since the amount of cranberries purchased depends on how many bags of fruit are demanded,what is the cost of the cranberries?

What is the term for the point at which there is no inclination for the price to rise or fall?

Leo Bliss manages a guest souvenir shop in Florida.He has decided to graph the demand per week for fresh orange juice because its price varies as the demand of fresh oranges varies.The graph indicates a demand schedule that slopes downward and to the right.This graph indicates that the quantity of juice demanded increases as which of the following occurs?

As a short-term pricing objective,which of the following can be effectively used on a temporary basis to sell off excessive inventory?

Price is defined as the perceived value of a good or service that is exchanged for a certain dollar amount.

What are the problems associated with the use of a cost-based pricing strategy? What contribution does cost make to the setting of prices?

What is the difference between fixed and variable costs? Give examples of each type of cost.

Craftarium,Inc.makes and sells beaded purses,jackets,slippers,and other fashion items.Which of the following is the best example of one of its fixed costs?

In a sluggish economy,consumers will buy even the most modest of products with the same discretion once shown only to big-ticket items,like computers,airfares,and designer clothes.The results are a growing popularity of cheaper private-label products and the likelihood that price wars among consumer goods could lead to the same kind of consolidation that occurred in the airline and electronics industries.Moreover,analysts say changing buying habits will force premium brand marketers to lower their prices to protect their positions.These companies may also upgrade products to distinguish them from private labels and promote their brands more aggressively than ever. One analyst says that consumers are forcing product innovation.Products have to be sold on merit.As a result,there will be fewer brands of significance,but the significant brands will be stronger.Brand loyalty is believed to exist only when,or if,value is provided.How do the significant brands compete? One analyst says that a combination of sensible pricing and innovation with a strong brand name can stabilize market share.Reformulated or repackaged products are typical examples of innovative attempts to solidify market share. -Refer to Consumer Buying Habits.In the past,Procter & Gamble set prices on significant brands such as Pampers so that total revenue was as large as possible relative to total costs.Which type of approach does this represent?

What is the term for the extra revenue associated with selling an additional unit of output?

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. -Refer to Walmart.What is the $19.99?

During the off-season,Nestlers,a bed-and-breakfast inn,offers a 25 percent reduction on its weekend rates to entice customers.How is the price reduction being used by the Inn?

What is the impact of the Internet on pricing strategies?