Ch 12 Concepts Mrkt
Assume a retailer purchases a can of premium dog food at $2.25 and adds 75 cents to the cost, making the price $3. What is the markup as a percentage of selling price?
25%
A business' Presidents Day sales are an example of _____.
periodic discounting
Firefly Space Shuttles is using a strategy of maximizing revenues by making numerous price changes in response to demand, competitors' prices, or environmental conditions. This is best described as _____.
yield management
Which of the following pricing strategies sets the basic product in a product line low, but the price on the items required to operate or enhance it are higher?
captive pricing
The Federal Trade Commission has established guidelines for _______: If the higher price against which the comparison is made is the price formerly charged for the product, the seller must have made the previous price available to customers for a reasonable time period.
comparison pricing
Which of the following is often used by producers of relatively homogeneous products, especially when the target market considers price to be an important purchase consideration?
competition-based pricing
ACME has a pricing objective to increase its primary product's sales relative to total industry sales. This is best describe as a(n) _____.
market share objective
Which of the following pricing objectives can reduce a firm's risks by helping to stabilize demand for its products?
status quo
A major reason why the final price may be different than what may result from the remaining steps in the price setting process is
the final price has to be adjusted to be consistent with industry practices.
ACME Corp.'s widgets have elastic demand. If ACME raises the price of widgets, what will be the result?
a decrease in total revenue
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 should be accomplished after developing pricing objectives?
assessing the target market's evaluation of price
Which of the following is calculated by dividing the variable costs by the number of units produced?
average variable cost
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 price bases is mostly likely to be used for commercial construction projects or custom made equipment?
cost-plus 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
Kara Thrace operates a service business that engages in systematically collecting data on brands and prices at competitors' stores. For which stage of the price establishment process would this service be most appropriate?
evaluating competitors' prices
A business's rental of production space is an example of a _____.
fixed cost
Which pricing strategy provides the most flexible introductory base price?
price skimming
Which of the following objectives is likely to be more expensive for a firm as the cost of materials and research and development may be greater?
product quality
Which of the following product-line pricing strategies is NOT generally used for business products?
psychological pricing
