Exam 19: Pricing Concepts

Ethan is an operations unit manager for Morningstar Foods. So far in developing his monthly budget, he has identified the following costs: Overhead at $120,000; Packaging at $70,000; Advertising at $60,000; Salaries at $400,000; Food production at $90,000, and Distribution at $22,000. The fixed costs in this situation would be

Scenario 19.2 Use the following to answer the questions.The BASF Chemical Company in Germany has developed a new rubberized coating. The product has an application for cell phones and other hand-held electronic devices that gives them protection from falls and scratches. BASF plans to market the product directly to businesses that manufacture the casings for these types of products. BASF currently uses a system of salespeople headquartered in Germany, while its primary business customers are in China. -Refer to Scenario 19.2. If BASF were to price its product in barrels from the factory, before it is loaded on the carrier, this would be an example of ____ pricing.

The fact that a gas station in Texas pays less for fuel than a gas station in Maine from a producer in Louisiana suggests that refineries are using which of the following pricing methods?

Seasonal discounts provide price incentives to customers during peak selling seasons.

Nicole is out shopping with her friends for the day. While evaluating a decision to purchase a handbag, she says, "People notice when you buy the most expensive brand of a product." Nicole is most likely a _____ consumer.

Nonprice competition emphasizes distinctive product features, service, and product quality.

F.O.B. factory denotes the price of the products at the factory. If the price is quoted as F.O.B. shipping, then shipping costs are paid by the seller.

​How can transfer pricing be calculated? Give three alternatives.

What are the implications of a downward-sloping demand curve?

Explain what is meant by price elasticity of demand.

Both the Federal Trade Commission Act and the Wheeler-Lea Act prohibit

In the long run, the J. F. Smucker Company must view ____ as the absolute lowest price for its Jif brand peanut butter.

Which of the following prohibits price discrimination that lessens competition among wholesalers and retailers?

If Colgate-Palmolive wants to maximize profit on its toothpaste, it should operate at the point where

A price developed in the consumer's mind through experience with the product is called a(n)

Which of the following statements about price elasticity is false?

Price is a key element in the marketing mix because it relates directly to

In setting price, it is wise to analyze competitors' prices.

At what point does a firm maximize profit?

Which of the following is not a method used to determine transfer prices?