Exam 13: Building the Price Foundation

If the CEO of the Clorox Company were to say,"We want to control 60 percent of the bleach market within the next five years," he would have set a __________ pricing objective.

The ratio of perceived benefits to price is referred to as

The ratio of __________ to price is referred to as value.

The break-even point (BEP)= [__________ ÷ (Unit price − Unit variable cost)].

Figure 13-2 above represents the six steps in setting price.Which letter represents the step where a firm would estimate dollar and unit sales revenues?

At a price of $4.00 each,SHAPE magazine sells 1.25 million copies of its magazine targeted to young women seeking a healthier lifestyle.If the price per issue is increased to $4.50 each,only 1 million copies will be sold.Fixed costs are $1 million and unit variable costs are $0.50 per magazine.Calculate the average revenue for SHAPE magazine at the higher price.

Jane Westerlund owns a picture-framing store,The Caplow Co.The average price she receives for a framed picture is $120.This price must cover her costs for a typical framed picture,which consists of $5 for glass,$2 for matting,$13 for the frame,and $30 for the labor involved.She must also cover monthly expenses of $1,000 for rent and insurance,$200 for heat and electricity,$500 for advertising,and $3,500 for her salary.Assuming there is no change in price or the quantity demanded,if Westerlund wants to increase her advertising expenses to a total of $1,000 (a $500 increase),this would cause total costs to __________ and the break-even quantity to __________.

The executive vice president of Washburn Guitars has set a sales target of 2,000 units for a new line of guitars.This type of objective is a(n)__________ pricing objective.

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

According to the price equation,final price equals list price minus __________ plus extra fees.

The break-even point (BEP)= [Fixed cost ÷ (Unit price − __________)].

Barter refers to

You have been asked to calculate the break-even point for a new line of T-shirts.The selling price will be $25 per shirt.The labor cost is $5 per shirt.The administrative costs of operating the company are estimated to be $60,000 annually and the sales and marketing expenses are $20,000 a year.Additionally,the cost of materials will be $10 per shirt.What is the break-even quantity?

Price elasticity of demand (E)is expressed as (∆ means change):

Which of the following statements is MOST ACCURATE?

Renfro's,Inc. ,is a company that sells 25 different relishes in 45 different states.Mrs.Renfro's chipotle corn salsa is so popular that the company cannot make enough to keep its resellers stocked.Its price of $4.50 for a jar seems just right to consumers who savor its hot and spicy taste.The popularity of hot and spicy food is an example of a __________ that Mrs.Renfro's has taken advantage of to make its product a success.

For any downward-sloping,straight-line demand curve,the marginal revenue curve always

Companies often pursue a market share objective when __________.

Figure 13-5A above shows that when the quantity demanded for Red Baron frozen cheese pizzas moves from 2 to 3 million units along the demand curve D₁,the profit

Which of the following illustrates a shift in the demand curve?