Exam 37: Pricing Concepts

Bottles of Pure Hawaiian Air contain air that smells like the floral bouquet that greets tourists as they get off the plane in Hawaii.When a tourist shop began selling Pure Hawaiian Air,it charged $5 per bottle and could not keep up with the demand.It has since raised the price to $7.Now the shop is still selling all the bottles of Pure Hawaiian Air it carries,but the owner is not forced to reorder on a daily basis.The $7 price is probably a(n):

What is the difference between fixed and variable costs? Give examples of each type of cost.

Dixie Furniture Company has recently moved to a new,larger location.At this new location,it has been unable to attract sufficient customers.Its owner did not have the cash to pay the current loan installment due on the building and inventory,so he decided to reduce all merchandise prices by at least 50 percent for a weekend sale to earn enough to make his loan payment.His pricing objective can be classified as:

At a price of $1,192,057,the Bugatti Veyron may be the most expensive street-legal car on the market today.Obviously,Bugatti is NOT using a(n)_____ pricing objective in setting the price for this car.

Price is defined as the value of a good or service as measured by a certain dollar amount.

Break-even analysis determines what sales volume must be reached before total revenue equals total costs.

The manufacturers that remain in the market toward the end of the maturity stage typically offer similar prices.

Profit maximization occurs when:

_____ pay for every activity of the company.

The typical break-even model assumes a given fixed cost and a:

Pierre's Ice Cream Company produces ultra-rich ice cream,which it sells in the Cleveland,Ohio,area.Last year,it managed to exceed its target return on investment (ROI)for the current fiscal year.The following results were found on its financial statements: What was the actual ROI for Peirre's Ice Cream Company?

What is marginal revenue? Based on the provided schedule from the Chesapeake Bay Swing Company,at which quantity should Chesapeake Bay stop producing additional swings?

Specialty Cakes Imagine that you're planning an after-symphony fund-raising party, and you need a life-size grand piano cake. Or, you are a developer proposing a new shopping center to a group of investors, and you want to serve a cake shaped like an architectural rendition of the center. Is this impossible? No, you just need to contact Cecilia Villaveces Cakes. She actually built a life-size grand piano for a gala in Macon, Georgia. You can expect to pay anywhere from $75 to $10,000 for one of Cecilia's artistic creations, depending on complexity of design and size. She uses only the best ingredients, and no two cakes are ever quite alike. -Refer to Specialty Cakes.Which of the following is the BEST example of a variable cost for Cecilia Villaveces Cakes?

The point at which marginal cost and marginal revenue are equal always results in:

Which of the following statements is NOT true about price?

Consumers' responsiveness or sensitivity to changes in price is known as:

Money that is left over after paying for company activities is called:

_____ is the extra revenue associated with selling an additional unit of output.

Chad has calculated the sales volume at which his lemonade stand's costs equal revenue.Over dinner,he announced to his family that he only needed to sell 50 glasses of lemonade at $5 per glass to cover all his costs (such as lumber and nails for the stand,lemons,and sugar).Which important factor has Chad excluded from his analysis?

One strategy to get adequate distribution for a new product is to offer dealers a large trade allowance to help offset the costs of promotion.