Exam 16: Pricing Concepts and Strategies

The revenue a firm receives is determined by the selling prices of its products multiplied by the number of units of each that are sold.

What is one of the most important aspects of government, or in some cases organizational, procurement?

What is demand or supply said to be when the calculated elasticity of demand or supply is greater than 1.0?

In an attempt to simplify pricing structures, sellers will quote standardized prices that, in effect, spread the total shipping costs across all the customers.

Many credit cards offer so-called "teaser" rates-low introductory rates that rise after a few months.What type of pricing strategy is the use of introductory rates an example of?

An oligopoly is a market structure with relatively few competitors and in which ease of entry into the industry by new firms is difficult due to high start-up costs.

What is it called when sellers get together and collude to set prices with respect to one or more requests for competitive proposals?

What is the organizational goal of a high School when it sponsors a $100-per-person auction to raise funds for the operation of the school?

The danger of a low-price strategy is that competitors can easily counter this approach.

Countries that export value-oriented products rather than commodities tend to enjoy more stable prices for those products.

When it comes to big-ticket items, business and government purchasers often legally enter into contracts with favoured suppliers.

Auctions are the purest form of negotiated pricing.

Flexible cost-plus global pricing allows companies to grant discounts or change prices according to shifts in the competitive environment or fluctuations in international exchange rates.

What do many government and organizational procurement departments do instead of paying set prices for their purchases?

What is the pricing policy that assumes that some prices are more appealing than others?

Assume the demand for a particular service is highly elastic.The firm can actually increase revenue by lowering the price.

Marketers may thoroughly understand price theory concepts but still encounter difficulty applying them in practice.

A market characterized by heterogeneous, well-differentiated products sold by a large number of sellers with some price control to a large number of buyers is monopolistically competitive.

Controlling demand for a new product through the pricing strategy could save a company from having dissatisfied customers by matching supply to the demand.

A charitable organization that is chartered as a not-for-profit entity would never attempt to set prices for its products high enough to cover expenses and provide a financial cushion to cover unforeseen needs because that would imply it desired to earn a profit.