Exam 18: Pricing Concepts

Concha y Toro,a Chilean wine,has reduced the price of one bottle from $10 to $8.It previously sold 420 bottles in the month prior to the price reduction,and it now sells 525 bottles per month.What is it experiencing?

Queeg Industries sells all types of artists' paintbrushes.When the owner of Queeg learned that Patterson Art,one of its biggest competitors in the region,had lowered its prices on all synthetic brushes by 5 percent,he did the same.Which type of pricing is this?

Pursonal Touch produces and markets beaded purses.When graphed,the demand schedule for its purses is a straight line.If one purse costs $20,5,000 beaded purses are sold.At $25,4,500 purses are sold.How many beaded purses will be sold if the price per purse is increased to $30?

According to your textbook,which of the following statements describes a limitation associated with break-even analysis?

Metro Supermarkets will place well-known brands on the shelves at high prices while offering its own Metro brand at lower prices.What is this practice an example of?

If demand for milk is elastic,consumers will not change their purchasing habits greatly when the price of milk changes.

According to your textbook which of the following statements describes an advantage of status quo pricing?

What is marginal revenue? Based on the provided schedule from the Bay Swing Company,at which quantity should Bay Swing stop producing additional swings?

Price equilibrium is the price at which supply and demand are equal,and there is no inclination for prices to rise or fall.

Consumers use price as an indicator of the quality of a product,especially when consumers have a substantial degree of knowledge about the product.

Yield management systems can be used by only service industries.

Regency,Inc.makes disposable cap and gown sets for graduations.Each cap and gown set sells for $15.The average variable cost for manufacturing 10 cap and gown sets is $100.Total fixed costs for the year equal $65,000.Calculate the break-even point in units.

Imagine you're planning an after-symphony fundraising party,and you need a life-size grand piano cake.Or,you are a developer proposing a new shopping centre to a group of investors,and you want to serve a cake shaped like an architectural rendition of the centre.Is this impossible? No,you just need to contact Cecilia Villaveces Cakes.She actually built a life-size grand piano for a major gala.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.Although many factors determine the prices charged by Cecilia Villaveces Cakes,what are the two primary determinants?

Which of the following best describes prestige pricing?

How do consumers use the price-quality relationship to evaluate goods? How can marketers take advantage of this consumer response?

Which of the following pay for every activity of the company?

An independent retailer of specialty kitchen items wants to determine what price she should put on a set of plastic wine glasses.They cost her $7.She wants a markup of 30 percent based on selling price.Which of the following is closest to the price she should charge her customers?

The Fenton Company produces memorial bricks,which veterans' organizations,chambers of commerce,and other service organizations sell as fundraisers.The company has a target return on investment of 13 percent.Which type of pricing objective does Fenton have?

The American Girl catalogue began as a concept to introduce today's girls to girls who lived in the past.Each historically accurate doll is carefully crafted and dressed and has books to describe her life.For example,Kristen is an 1854 pioneer girl who is growing up in Minnesota.Her story begins with her long sea voyage from Sweden.The basic doll dressed in a calico dress and striped apron plus the hardcover story of how she got to Minnesota costs $90.Six more hardback books of Kristen's life are available for $74.95.Kristen's nightgown costs $20,and a matching one for the doll owner is an additional $38.Buy both together and the price is only $50.A hand-painted wooden bed and trunk for Kristen are available for $213.Shipping costs vary with the price of the merchandise ordered. -Refer to American Girl Doll.The popularity of the American girl dolls is so great that an increase in the price of the basic Kristen doll and books by 5 percent will not significantly affect the demand for the product.What is the demand for the American Girl doll?

List three factors that affect elasticity of demand.Briefly describe how each affects demand.