Companies Use a Price Premium to Assess Whether Their Products

Multiple Choice

Companies use a price premium to assess whether their products and brands are priced above, at, or below the market. The price premium is the percentage by which the actual price charged for a specific brand exceeds or falls short of a benchmark established for a similar product or basket of products. This price premium equals:

A) unit volume market share for a brand divided by dollar sales market share for a brand, minus 1.
B) dollar sales market share for a brand divided by unit volume market share for a brand, plus 1.
C) dollar sales market share for a brand divided by unit volume market share for a brand, minus 1.
D) dollar sales market share for a brand, divided by unit volume market share for a brand, plus 1.
E) dollar sales market share for a brand, divided by unit volume market share for a brand, minus the number of competitors against which a brand is being measured.