Exam 13: Building the Price Foundation

If competitive market circumstances are such that there are few sellers who are sensitive to each other's prices, and the purpose of advertising is to inform but avoid price competition, then __________ must exist in the industry.

Which term describes factors that limit the range of prices a firm may set?

Which of the following represent elements of Step 2 of the price-setting process?

Price elasticity of demand is determined by a number of factors, such as the availability of substitutes, the necessity of the product or service, and

George and Alice Renfro decided to start a family business in 1990 to produce chowchow, a Southern regional food. To determine how they would price the chowchow, the Renfros had to examine (1) the demand for the product and the cost to distribute the product to area grocery stores. For the Renfros, Step 1 of their price-setting process consists of

In a snack vending machine, consumers can select one of many choices. These snacks are

A target return profit objective implies that a company chooses to

The competitive market situation in which many sellers compete on nonprice factors is referred to as

For the sake of simplicity and by convention, price elasticity figures are shown as

What factors determine price elasticity of demand?

Economists have identified four types of competitive markets: pure monopoly, pure competition, oligopoly, and

A firm may forgo higher profit on sales and follow which of the following pricing objectives because it wants to recognize its stakeholder obligations?

The owner of a small restaurant that sells takeout fried chicken and biscuits each month pays $2,500 in rent, $500 in utilities, $750 interest on his loan, insurance premium of $200, and $250 on advertising on local buses. A bucket of chicken is priced at $9.50. Unit variable costs for the bucket of chicken are $5.50. How many buckets of chicken does the restaurant need to sell to break even each month?

Many convenience stores now have mail slots where customers can pay their utility bills. The utility companies handle all the processing while the customers get the benefit of not having to use postage. The convenience store owner gets the advantage of the extra foot traffic. The mail slots are an example of

The particular type of competition dramatically influences the range of price competition and, in turn,

What are the six broad objectives that an organization may pursue that tie in directly to its pricing policies?

Each month, the owner of a car wash pays $2,500 in rent, $500 in utilities, $750 interest on the business loan, an insurance premium of $200, and $250 on advertising on local bus routes. A full-service car wash is priced at $10.50. Unit variable costs for the car wash are $7.50. At what level of revenue will the car wash break even?

Acme Shoe Co. sells heel replacement kits for men's shoes. It has fixed costs of $6 million and unit variable costs of $5 per kit. Suppose a consultant tells Acme that it can sell 750,000 heel repair kits. What price must Acme charge to achieve a profit of $2.5 million?

Economists have identified four types of competitive markets, which are

Economists have identified four types of competitive markets: pure monopoly, monopolistic competition, pure competition, and