Chat with AIExam 12: Pricing Concepts and Strategies
Explain the mathematical equation TC = FC + VC in terms for a minor league baseball team.
(31) 
VerifiedTotal cost (TC)-refers to the total cost that an owner would realize,with this being equal to the fixed costs (FC)and the variable costs (VC).The fixed costs (more in number)are the expenses that are stable and do not change.For example,rent on the stadium,salaries,and transportation.The variable costs (fewer in number)are expenses that vary and change as a result of the product being consumed.For example,advertising and game promotions for a minor league baseball team can and do vary depending on team performance.
When it comes to external factors putting constraints on sports pricing,legal issues are an area that has little effect on sport products.
(37) VerifiedFalse
Define price discounts and list and describe the types.
(36) VerifiedPrice discounts: these are incentives offered to buyers to stimulate demand or reward behaviors that are favorable to the seller.
1.Quantity discount: rewards the buyer for purchasing large quantities of a sport product.For example,Nike shoe company may offer the customer an incentive to purchase a pair of shoes and get the second pair free,or the Wilson Co.may offer a retailer a discount on basketballs if the retailer buys a large quantity.
2.Seasonal discount: most sports are seasonal so a retailer may offer end-of-season discounts.For example,fishing equipment like rods and reels may be a set price and by the end of the fishing season,the retailer may offer 25 to 30 percent off.
In sports marketing,price adjustments may be made in order to stimulate demand for sporting products when sales expectations are not currently being met.
(40) (The)_____ is the point at which consumers detect a change between two stimuli (prices).
(44) The internal factors determining the price of a sports product include all of the following EXCEPT _____.
(35) With the sports pricing concept,costs are those factors associated with producing,promoting,and distributing the sports product.
(29) Seasonal discounts are prevalent in sports marketing because of the nature of most sports (snow skiing,waterskiing,fishing,football,baseball).
(33) Unitary demand is defined as a situation where price changes are offset exactly by changes in demand; in other words,price and demand are perfectly related.
(41) The _____ that may affect a consumer's acceptable range of prices include the presence or absence of time,the usage situation,and social factors.
(36) Exclusive distribution of a sports product is usually associated with _____.
(43) The most central tenet in pricing is understanding the concept of _____.
(31) All of the following are ways to estimate demand EXCEPT _____.
(40) The quantity of a sports product that consumers are willing to purchase at a given price is known as _____.
(37) Consumer demand is one of the least critical factors in determining the price of sports product.
(30) List and describe the four categories of organizational objectives that influence the sport pricing decisions.
(46) The mob effect (or the crowd effect)describes a situation in which consumers believe it is socially desirable to attend "special" sporting events.
(40) Rent or lease on an arena for a minor league hockey franchise is considered a(n)_____ cost item.
(36) Ski equipment that is discounted in the summer to stimulate sales is known as _____.
(37) 
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