Exam 18: Pricing Concepts

The marginal revenue and marginal cost at various levels of output is listed below: Output Marginal Revenue ($) Marginal Cost ($) 100 16 14 150 15 12 200 12 10 250 9 9 At what level of output is profit maximized?

Mignon d'Armitage manufactures jewelry.This firm is planning to introduce a new necklace and is trying to determine how many units it must sell in order to break even.Fixed costs are $100,000 and variable costs for each unit will be $20.At the price of $45 each,the number of units that must be sold in order to break even is:

Countries that export international commodities,such as wood,chemicals,and agricultural crops,suffer economically when their prices fluctuate.

The challenge for those who compete on value is to convince customers that low-priced brands offer quality comparable to that of a higher-priced product.

​You would like to apply breakeven analysis to know when your startup tutoring venture will turn a profit.Which of the following considerations must you take into account?

High-demand sporting or concert events have encountered an expensive,often illegal,form of pricing where tickets are resold at a much higher price than what it was originally bought for.This practice is called ticket scalping.

Brandon recently completed law school,passed the bar exam and began working for a prestigious law firm in Dallas,TX.The firm has a strict dress code and Brandon is required to wear business suits,dress shirts,ties,and dress shoes.He is investing in a new wardrobe and visited Men's Discount Warehouse to purchase new clothes.He shared his situation with Tim,his sales representative and Tim told him that if he bought 2 suits,he would receive 2 dress shirts,3 ties and 2 pairs of socks for free.Which of the following statements is TRUE regarding this example?​

In the global marketplace,prices are directly affected by special types of taxes called tariffs.

Discuss cost-plus pricing.

Breakeven analysis is an effective tool for marketers in assessing the sales required for covering costs and achieving specified profit levels.

Modified breakeven analysis combines the traditional breakeven analysis model with an evaluation of:

Cost-plus pricing is the least popular method of setting prices.

According to the PIMS research,firms with market shares above 40% show an average _____ return on investment.

When most of a firm's costs are fixed over a wide range of outputs,the primary determinant of profitability will be the:

Purely cost-oriented approaches to pricing violate the marketing concept,so modifications that add demand analysis to the pricing decision are required.

You are the marketing manager for a multi-state auto dealership in the Midwest.It is that time of year when your fleet of autos goes through major model year changes.You are putting the final touches on your pricing strategy to facilitate getting your inventory of autos low enough to make room for the new models. ​ ​What is the practical problem involved in using your current sales and commission data to make pricing decisions?What pricing strategy solution would best address that problem?

A customary price represents an upper limit on the price of a product imposed by the government in order to control the prices of essential products such as food items.

Match each item with the correct statement below. -A schedule of the amounts of a good or service that firms will offer for sale at different prices during a specified time period is called _____.

The Robinson-Patman Act was intended primarily to save jobs.

​Managers often find it difficult to estimate demand at various price levels.