Exam 13: Building the Price Foundation

The average price Washburn charges for a guitar is $349.This price must cover its variable costs of $25 for direct materials and $120 in direct labor.It must also cover fixed expenses of $38,000.Assuming everything else stays the same,the company's planned move to Nashville,Tennessee,will reduce its fixed costs by $4,800.This would cause total costs to __________ and the break-even quantity to __________.

Washburn Guitars markets its guitars to four distinct market segments.The firm's one-of-kind custom instruments are targeted at

Pure competition is the competitive situation where

Microsoft,Sony,and Nintendo are the three principal firms in the video game console market.How much price competition is most likely for video game makers?

Attorneys' fees,entrance fees,train fares,and organization dues are all examples of

To increase value,marketers may __________,decrease price,or do both.

If you wanted to buy a McDonald's Big Mac,small fries,and a small drink separately,it will you cost you $6.19.However,if you purchased these three items together as part of the firm's Extra Value Meal package,you would pay only $4.39,savings 80¢.This "Extra Value Meal" price serves as __________ to you and other consumers,who compare the costs and benefits of substitute items to a bundle containing those items.

Value-pricing refers to

Each month,the owner of a carwash pays $2,500 in rent,$500 in utilities,$750 interest on the business loan,an insurance premium of $200,and $250 on advertising on local bus routes.A full-service carwash is priced at $10.50.Unit variable costs for the carwash are $7.50.At what level of revenue will the carwash break-even?

If a firm finds the demand for one of its products is inelastic,it can increase its total revenues by

Figure 13-2 above represents the six steps in setting price.Which letter represents the step where a firm would estimate demand?

What is StubHub's pricing formula?

Objectives like profit,market share,and survival as well as constraints such demand for product class and brand,newness,costs,and competition are issues that would be addressed during __________ of the price-setting process.

In Figure 13-10 above,which is a break-even chart that depicts a graphic presentation of a break-even analysis for a picture frame store,the green-shaded area "GAF" represents the firm's

Define marginal analysis.

Which of the following statements would most likely be spoken during Step 2 of the price-setting process?

The use of "special fees" and "surcharges" is driven by consumers' zeal for low prices and __________.

Which of the following is a typical example of a variable cost?

Campbell Soup spent seven years and $55 million on a super secret project to produce a line of Intelligent Quisine (IQ)food products "scientifically proven to lower high levels of cholesterol,blood sugar,and blood pressure." They were responding to the needs and desires expressed by consumers.However,after 15 months in an Ohio test market,Campbell Soup yanked the entire IQ line because

Which of the following would be an example of a constraint in Step 1 of the price-setting process?