Exam 12: Pricing Concepts

Suppose that the watchband department of Timex sells completed watchbands to the finished watch department. The finished watch department is charged the price it would have to pay an outside watchband manufacturer less a discount to reflect low sales and transportation costs. This method of pricing is called ____ pricing.

Setting prices for business customers is very similar to setting prices for consumers.

At what point does a firm maximize profit?

Identify and describe the major factors that affect pricing decisions.

Price is the value that is exchanged for products in a marketing transaction.

For most products, a(n) ____ relationship exists between the price of a particular product and the quantity demanded.

Marketers have no flexibility in setting prices under conditions of

A product under nonprice competition would most likely not succeed in the market if

Pricing decisions should be based on the marketer's previous marketing strategies for other successful products and on intuition.

In conducting an assessment of her accounting firm, Pauline Santana discovers the following annual results: average charge per customer = $250; rent = $12,000; total billings = $150,000; employee compensation and benefits = $60,000; and other costs = $110,000. Given these results, Mary's profits would equal

If fixed costs = $6,000, selling price = $10, and variable costs per unit = $5, what is the breakeven point in units and in dollar sales volume?

Which of the following products is most likely to involve personal selling?

With prestige products, a firm will always be able to sell more at a higher price.

What are the implications of a downward-sloping demand curve?

The oldest form of exchange¾trading of products¾is known as

Transfer pricing involves the sale of a product to another unit within the same organization.

The firm should produce the quantity at which marginal revenue and marginal cost are equal.

The value of an idea cannot be assessed by price.

Organizational goals have little to do with pricing decisions.

When marginal cost is equal to marginal revenue, the firm should