Exam 11: Pricing Products and Services

-Jane Westerlund owns a picture frame store and has generated a spreadsheet of several calculations based on different quantity, price, revenue, cost, and profit scenarios shown in Figure 11-5 above. What is the break-even point quantity for her picture frame store?

A flexible-price policy refers to

Which of the following statements about penetration pricing is most accurate?

The formula, Total revenue - Total cost or [(Unit price × Quantity sold) - (Fixed cost + Variable cost)] represents __________.

What pricing method is often used because of the difficulty in establishing a benchmark of sales or investment to show how much of a firm's effort is needed to achieve the target?

A Patek Philippe Sky Moon Tourbillion men's wristwatch is among the most expensive in the world, costing over $1.75 million. This is an example of a __________ strategy.

Setting an annual target of a specific dollar volume of profit is referred to as __________.

Summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price is referred to as __________.

If a firm finds the demand for one of its products is inelastic, it can increase its total revenues by

Suppose you are the owner of a picture frame store and you wish to calculate how many pictures you must sell to cover your fixed and variable costs at a given price. Let's assume that the demand for your pictures is strong, so the average price customers are willing to pay for each picture frame is $120. Also, suppose your fixed costs (FC) total $32,000 (real estate taxes, interest on a bank loan, etc.) and unit variable cost (UVC) for a picture frame is $40 (labor, glass, frame, and matting). If your picture frame store sold 2,000 picture frames, what would your profit or loss be?

While pricing objectives frequently reflect corporate goals, pricing constraints often relate to

Which of the following statements regarding pricing constraints is most accurate?

According to the textbook, clothing manufacturer Hart Schaffner & Marx and retailer Bloomingdale's use __________ pricing.

-Figure 11-2 above represents the four approaches to selecting an appropriate price level. Box C includes target profit and target return on sales so it represents which approach?

When buying a car, __________ may result in discriminatory practices.

How do consumers use price in their assessments of value?

Prestige pricing is considered to be a __________ approach to pricing.

Four pricing practices are closely scrutinized because of potential unethical or illegal actions. They include: (1) predatory pricing; (2) price discrimination; (3) deceptive pricing; and (4) __________.

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

Several companies produce latex gloves that are used in a variety of different industries. If one of the glove manufacturers decreases its price by just a few percentage points, it will result in a significant increase in quantity demanded. The demand for latex gloves is