chapter 19 concept checks

ACME Corp.'s widgets have elastic demand. If ACME raises the price of widgets, what will be the result?

a decrease in total revenue

ACME Corp. and Spacely Inc. are engaged in intense price competition in order to boost market share of their widgets. This is best described as _____.

a price war

Spacely Inc.'s sprockets have inelastic demand. If Spacely raises the price of sprockets, what will be the result?

an increase in total revenue

Which of the following is calculated by dividing the variable costs by the number of units produced?

average variable cost

To compete effectively on a price basis, a firm should ____.

be the low-cost seller of the product

Which of the following is the point at which the costs of producing a product equals the revenue made from selling the product?

break-even point

Which of the following is a major advantage of nonprice competition?

building customer loyalty toward the brand

ACME Corp. offers a price discount to encourage prompt payment. Which of the following is it likely to use?

cash discount

The Federal Trade Commission is investigating ACME Corp. for using misleading price tags at its outlet stores to deceive customers into believing they are getting a bargain on Wile E. branded items. Which of the following does the FTC believe ACME is guilty of?

deceptive pricing

Which of the following shows the quantity of products a firm expects to sell at various prices if other factors remain constant?

demand curve

Which of the following is NOT one of the factors that influence the assessment of value?

elasticity of demand

A business's rental of production space is an example of a _____.

fixed cost

A price developed in the buyer's mind through experience with the product is a(n) _____.

internal reference price

Which of the following pass on to a business customer the cost savings gained through economies of scale

quantity discounts

Price is a key element in the marketing mix because it relates directly to the generation of total _____.

revenue

Which of the following charges the same price to all customers regardless of geographic location, and the price is based on average shipping costs for all customers?

uniform geographic pricing

Maria is concerned about both price and quality of a product. Marketers would best describe her as which of the following?

value-conscious