Exam 18: Pricing Concepts

The practice of adding a percentage of specified dollar amount-or markup-to the base cost of a product to cover unassigned costs and to provide a profit is called _____ pricing.

A five-pound bag of roasted peanuts sells for $8,and the average variable cost is $4 per bag.If the total fixed cost for the roasted peanuts is $80,000,the breakeven point in bags is:

Volume-related pricing objective with the goal of controlling a portion of the market for a firm's product is known as a ______ objective.

A shortcoming of the breakeven model is that it assumes that per-unit variable costs change at different levels of operation.

A value pricing strategy works best for relatively high-priced goods and services.

For consumers to pay prices either above or below what they consider the going rate,they must be convinced they are receiving fair value for their money.

Describe the significance of yield management.

If consumers can easily find close substitutes for a good or service,the product's demand tends to be inelastic.

The management at Fries,a potato chips manufacturer,is calculating their quarterly profits.According to the official data,the firm has sold 200,000 units of their chips priced at $2 per unit for the quarter.The firm had spent $100,000 on production,processing and other costs.The profit made by Fries for the quarter is:

Which of the following is a market structure in which only one seller of a product exists and for which there are no close substitutes?

The point at which the additional revenue gained by increasing the price of a product equals the increase in total costs is called _____.

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

Full-cost pricing allows the marketer to recover all costs plus the amount added as a profit margin.

The basic breakeven model considers demand.

The marginal revenue and marginal cost at various levels of output is as mentioned below: Identify the level of output at which profit is maximized?

A 5 percent increase in the price of milk that results in a 2 percent decrease in the quantity of milk demanded yields a price elasticity of demand for milk of:

The Acme Flashlight Company breaks even at 20,000 flashlights at $6 each,with the average variable cost per flashlight of $4.The amount of its fixed costs is:

Prestige objectives reflect marketers' recognition of the role of price in creating an overall image of the firm and its product offerings.

Modern accounting procedures provide managers with a clear understanding of cost structures,so managers can readily comprehend the supply side of the pricing equation.

The challenge for those who compete on value is to convince customers that low-priced brands offer quality comparable to that of a higher-priced product.