Exam 19: Pricing Concepts

Sellers using nonprice competition are not concerned with prices charged by competitors.

The major disadvantage of using price competition is that it takes a long time to implement the changes in price.

Setting prices for business customers is very similar to setting prices for consumers.

A customer's interpretation and response to a price depends on what the customer receives from a purchase compared to what he or she gives up to make a purchase.

The value of an idea cannot be assessed by price.

Tim O'Brien gets the invoice for a load of gravel he purchased last week. The price of the gravel was $55, and the terms are 2/10, n/45. If Tim pays the invoice in five weeks, he will owe

What does the demand curve for a prestige product look like?

If fixed costs = $6,000, selling price = $10, and variable costs per unit = $5, what is the breakeven point in units and in dollar sales volume?

Nonprice competition does not permit unique product features, higher product quality, and customer service.

The idea behind prestige demand is that many prestige products seem to sell better at a high price than at a low price.

What assumption does breakeven analysis make that limits its overall usefulness?

You are the general manager of the machining products division of a diversified manufacturing company in Des Moines, Iowa. You primarily produce machining products for sale to wholesalers around the world. However, you periodically get requests from other divisions in your company to purchase your products. You treat these purchase requests the same as a purchase request from a non-affiliated entity. You sell your machining products to other internal divisions at a price that is equivalent to a market-based cost.This is example of which of the following types of business pricing? ​

Justin, a sales representative for Serta Mattress manufacturers, phones Kirk of Southside Furniture to inform him that if he will increase his recent order of 15 mattress sets to 20, he will receive a 14 percent price reduction. This offer is due to a recent overstock condition at the factory and will not be available in the future. The discount offered here is

Noncumulative discounts are one-time reductions in prices based on the number of units purchased, the dollar value of the order, or the product mix purchased.

Elastic demand is usually a result of the lack of substitute products.

Scenario 19.1 Use the following to answer the questions.Concession Supply sells hotdogs, buns, and nacho ingredients to several major league ballparks across the country. Currently, Concession Supply has the following pricing information for one case of hotdogs sold at Wrigley Field: Total fixed costs = $1,200, Selling price = $16, and Variable costs = $6. -Refer to Scenario 19.1. If Concession Supply wanted to make a profit of $800 on each case, it would need to sell ____ cases.

One advantage of nonprice competition is that

Why is the marginal revenue of a product important to the marketer?

Scenario 19.1 Use the following to answer the questions.Concession Supply sells hotdogs, buns, and nacho ingredients to several major league ballparks across the country. Currently, Concession Supply has the following pricing information for one case of hotdogs sold at Wrigley Field: Total fixed costs = $1,200, Selling price = $16, and Variable costs = $6. -Refer to Scenario 19.1. If Concession Supply increased its price by 10 percent and experienced only a 2 percent decrease in the demand for hotdogs, the demand would be

French Quarter Inns drops the price of a suite from $225 to $195 per night and experiences a reduction in the quantity of rooms demanded of an average of five per night. This is an indication that suites at this hotel are apparently an example of a(n) ____ product.