Exam 18: Pricing Concepts

Mitch owns Lakeside Apple Growers.The monthly payment on the land he purchased for his orchard,the mortgage on his small office building,and his business license are all examples of which type of costs?

Which of the following occurs when an increase in sales exactly offsets a decrease in price so that total revenue remains exactly the same?

List the three types of elasticity of demand.What would the demand curve for elastic and inelastic demand look like when graphed?

Procter & Gamble dropped the price of Pringles Potato Chips due to price competition and consumer demand.As a result of the price reduction,why did Procter & Gamble experience increased unit sales and earnings by 10 percent?

Although many factors can influence price,what are the primary determinants?

According to your text,how is price best described?

When does profit maximization occur?

Profit maximization is the most common pricing objective used by firms.

Canning White has decided that the pricing strategy at his sporting goods store will include advertisements offering discounts on the Nesco brand aluminum cooking set for campers. What does this pricing strategy clearly involve?

List the two primary determinants of price.What other factors can affect price setting?

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.One analyst said that the big brands such as Starbucks,Folgers and Maxwell House can compete by combining sensible pricing and innovation with a strong brand name.This is done to stabilize market share.Which type of pricing is this?

Hal Macini,owner of Evergreen Landscaping,is more interested in earning customer goodwill than striving for maximum profit.He determines his prices by maintaining the company's profitability at a level that gives him a good living but will never make him a rich man.What is Macini basing his pricing policy on?

An analyst at Loude Office,a company that makes wooden desks,has calculated the sales volume at which the company's costs equal revenue.This analyst announced at the company's quarterly sales meeting that 13,000 desks at an average cost of $150 must be sold to retail stores during the next quarter to reach this point.Which important factor has been excluded from his analysis?

Which of the following is most likely to be a variable cost for an Internet retailer that sells spices,herbs,and seasonings to consumers?

Richelieu Foods,Inc.decided to offer a much larger than customary profit margin to grocery wholesalers and retailers on its new line of organic pizzas.This pricing strategy is designed to do which of the following?

What is keystoning?

The daily demand for bottled water is 35 bottles when the price is set at $1.However,if the price is raised to $5,the demand is only 5 bottles.The bottled water producer is willing to supply 40 bottles if the price is set at $5 per bottle,but will supply only 10 bottles if the price is set at $2.Draw the supply and demand curves for the water bottles on the graph below.Label each curve and each axis.At what level does equilibrium occur? What are the areas of surplus and shortage?

Yield management systems were first used by Internet service providers.

The pricing policy used by Middleton Industries,manufacturer of Renaissance charms for bracelets and necklaces,is to set prices so its retail prices are as high as the market will tolerate.Additionally,Middleton strives to keep its costs at an industry low by using silver and gold overlays over charms made of cheap base metal.Which type of policy is this?

Which of the following statements best describes YMS?