Exam 18: Pricing Concepts

Match each item with the correct statement below. -A market structure in which relatively few sellers compete and where high start-up costs form barriers to keep out new competitors is referred to as a(n)_____.

A profit-maximizing price rises to the point at which further increases will cause disproportionate decreases in the number of units sold.

Marketers determine prices in two basic ways: by applying the theoretical concepts of supply and demand and by completing cost-oriented analyses.

In an oligopolistic market,price cutting is likely to increase total industry revenues.

​John learned in business school that full-cost pricing is a very common cost-oriented pricing procedure,and he planned to use it in setting price for his firm's new software product.However,his boss is not convinced that full-cost pricing is best,and wants John to list both its pluses and minuses in a memo.Which of the following should be included in John's list?

The price of products only includes the costs incurred by the manufacturer for procuring the raw material and for processing the products.

Volume-related pricing objective with the goal of controlling a portion of the market for a firm's product is known as a ______ objective.

Which of the following market structures involves a heterogeneous product and product differentiation among competing suppliers,allowing the marketer some degree of control over prices?

Overall organizational objectives and more specific marketing objectives guide the development of pricing objectives,which in turn lead to the development and implementation of more specific pricing policies and procedures.

Which of the following can be categorized as a tariff?

The basic breakeven model considers demand.

A firm maximizes its profits when:

The practice of adding a percentage of specified dollar amount-or markup-to the base cost of a product to cover unassigned costs and to provide a profit is called _____ pricing.

The Acme Flashlight Company breaks even at 20,000 flashlights at $6 each,with the average variable cost per flashlight of $4.The amount of its fixed costs is:

Which of the following market structure is characterized by the non-existence of direct competitors?

_____ cost is the change in total cost that results from producing an additional unit of output.

​You work for an international women's clothing wholesaler.In the past,your firm has marketed mainly in Western Europe,using price to achieve either profitability or prestige objectives.But changing business conditions mean that you now need to focus on other pricing objectives.What conditions are likely to have changed?

Match each item with the correct statement below. -The method of analyzing the relationship among costs,sales price,and increased sales volume is called _____.

You are a brand manager for a large chain of grocery stores.You have been working overtime for the last two weeks to prepare for your pricing objectives meeting with the head of sales and marketing.You walk into the meeting with a high degree of confidence in the strategy that you have for setting the pricing objectives for your brand category for the upcoming year.You are speechless when the marketing head tells you that no changes in the pricing objectives will be made for your brand category.He says he believes it is most prudent to leave the existing pricing objectives as they are for the upcoming year. ​ ​Required: Which of the following statements is the best explanation for the marketing head's decision to leave the existing pricing objectives in place with no change?

For consumers to pay prices either above or below what they consider the going rate,they must be convinced they are receiving fair value for their money.