Ch 13- Building the Price Foundation Connect Quiz & LearnSmart

College students pay tuition, fees, and other charges each year to attend their educational institution. Using the price equation, what is the final price or cost to attend college for a typical semester based on the following data for an in-state student: tuition = $4,000; technology fee = $25; healthcare insurance = $50; student activity fee = $25; room & board = $5,000; books = $500; transportation & parking = $400; financial aid from work study (10 hours per week at $10 per hour wage)*15 weeks = $1500; scholarships = $1000; and a discount of $500 for taking 15 credit hours?

$7,000

The Precision Writing Instruments Company makes a high-end pen known as the Cordova. Materials cost per pen is $6. Labor cost per pen is $5. Production overhead is $1,000,000. Advertising and promotion is $1,000,000. What is the total cost for sales of 500,000 units of the Cordova design?

$7,500,000

Crunchy Festival sells their packages of granola for $2.50 to students. Over the weekend they sold 320 packages. What was Crunchy Festival's total revenue?

$800

According to the price equation, to find the actual price, you should do which of the following to the list price?

-Add extra fees -Subtract Incentives and allowances

Which of the following are the three factors that influence demand?

-Consumer tastes -Consumer Income -Price and availability of similar products

Which of the following many mean that the amount paid is not the same as the list price?

-Discounts -Surcharges -Rebates

Total cost is the sum of which of these?

-Fixed Costs -Variable Costs

Strategies that can be used as part of a firms profit objectives include which two of the following?

-Maximizing current profits -Target return

Which of the following are types of competitive markets?

-Oligopoly -Monopolistic Competition

Which two of the following are factors that cause price inelasticity?

-Products are considered necessities -Few available substitutes

Break-even analysis the relationships between which two at various levels of output?

-Total cost -Total revenue

A break-even analysis chart shows the intersection of which two curves

-Total revenue -Total costs

Which of the following are essential to consider when setting a price?

-What will pay for all associates costs, including marketing? -What are customers willing to pay? -What will provide a profits to the company?

North Safety Products manufactures butyl gloves that offer permeation resistance to gas or water vapors for workers that use dangerous chemicals like ketones. The company has fixed costs of $10 million for its butyl glove production and unit variable costs of $5 per pair. If the company charges $15 per pair, how many pairs of gloves must it sell to break even?

1,000,000 pairs

Order the following steps in setting prices,with the first step on top

1. Identify pricing objectives and constraints 2.Estimate demand and revenue 3.Determine cost, volume, and profit relationships 4. Select an approximate price level 5. Set list or quoted price 6. Make special adjustments

If you sell picture frames for $120 each, and you have fixed costs of $32,000 and unit variable costs of $40, what is your break-even point?

400 pictures

Movement along a demand curve occurs because of

A change in price

Which of the following does NOT cause a shift in the demand curve?

A change in price

A shit in the demand curve is the result of

A change in selling conditions

The typical relationship between price and demand is shown as

A downward-sloping demand curve

Which of the following is not an example of a price?

A tax

All of the following products and services are considered to price inelastic except which?

Airline Ticket

Maria's cell phone has poor service in her dorm. She investigates and finds there are only three providers of service in her area. This is an example of

An oligopoly

The slope of the demand curve shows that

As price increase,demand decreases

When Wilkinsion Sword exchanged some of its knives for advertising used to promote its razor blades, it was an example of

Barter

Business must often make decisions based on the relationship between total revenue and total cost at various levels of output. The ____________ is the quantity at which total revenue and total cost are equal

Break-Even Point

The point at which the number of units sold generates enough revenue to equal total costs is known as

Break-Even point

Small changes in price

Can have comparably big effects on company profit

The demand for a product class, a product, or a brand, or the newness of a product can act as pricing__________ to limit a firms options

Constraints

Selling via the internet reduces the pricing constraints?

Cost of changing price

A firms prices are constrained in one way because it must cover all__________ for producing and marketing a product

Costs

The social responsibility pricing objective often results in

Decreases profits

A portion of a ______ curve is shown here

Demand

Generally, the greater the ____________ for a product, the higher the price that can be set

Demand

When the New York Mets set higher prices for game versus the popular New York Yankees than for those versus the Pittsburgh Pirates, it's pricing is constrained by

Demand

The chart that shows how many units of a product or service consumers will demand during a specific period of time at different prices is known as the

Demand curve

The relationship between price and quantity sold is called the

Demand curve

An example of a variable cost is

Direct labor used to manufacture the products

A manufacturer that uses coupons and other small price decrease to create large changes in demand is relying on a(n)_______ demand for the product

Elastic

Price______ of demand is a measure of how sensitive consumer demand and the firm's revenues are to changes in the products price

Elasticity

_____________ cost is the sum of the expenses of the firm that are stable and do not change with the quantity of a product and sold

Fixed

For a firm, rent, landscaping, and insurance are best examples of:

Fixed costs

You sell picture frames at your business and because they're flying off the shelves you decide to give your salaried mangers a 5% raise. What does this do to your break-even point?

Fixed costs increase,so the break-even point does as well.

A product for which nostalgia or fad factors come into play is likely to

Have higher prices later in its product life cycle

When there are many substitute products available, the price elasticity of demand for a given product will likely be

Higher

The key element in the definition of pure competition is that the products offered by the different firms are perceived by the consumer to be

Identical

What customers can buy is influenced by their

Income

According to price elasticity, when the price of IPhone drop, the demand for IPhone is likely to

Increase

When a 1 percent decrease in price results in less than a 1 percent increase in quality sold, demand for the product of service is:

Inelastic

Despite the recent increases in gas prices, Americans have barely decreased their consumption, which is an example of

Inelastic demand

Which of the following product categories is the best example of an oligopoly?

Large jetliners, which consists of just Boeing and Airbus

Which of the following product categories is the best example of an oligopoly?

Large jetliners, which consists of just. Boeing and Airbus

If a firm prices a product low, to the customer this may signal

Low quality

Dell Technologies develops high-quality personal computers with modest profit margins to penetrate a competitive marketplace and position itself for the coming years. This is an example of

Managing for long-run profits

With which profit-oriented pricing objectives is a firm likely to price its products relatively low compared to their cost to develop, with the prospect of gaining a high market share?

Managing for long-run profits

Out-of control_________ compared to foreign car companies resulted in the US government investing billions of dollars in US car companies, trying to restructure them to make them competitive

Manufacture costs

Firms often pursue____________ as a pricing objective when industry sales are relatively flat or declining

Market Share

A department store, pressured to meet year-end targets, liquidated a large amount of merchandise at low prices even though it was likely to create problems in the new year. This is an example of which pricing objectives?

Maximizing current profit

American firms are sometimes criticized for using which profit-oriented pricing objective, because it results in a short-term orientation?

Maximizing current profit

If a company sells many different laptops, it's own product line constrained pricing for each product because

Meaningful price differentials communicate value to consumers

The situation in which many firms compete for customers in a given market and products are differentiated is known as

Monopolistic Competition

A marketing manger considers pricing objectives and constraints to

Narrow the range of choices among the variety of pricing strategies

A firm may set goals for its business in terms of profit, sales, or unit volume. These are types of pricing _______.

Objectives

Total cost is quality to fixed cost?

Plus the variable cost

Which element of the marketing mix is part of the profit equation and therefore, has direct effect on a firms profits?

Price

If loyalty toward a particular brand makes other brands seem less substitutable, it decreases

Price elasticity of demand

__________________represents the vertical axis of a demand curve graph

Price per unit

Pricing decisions are difficult because

Price simultaneously affects total revenue and total cost

Break even analysis can help evaluate the impact of changes in _______________ and ________ on ________

Price,Cost;Profit

A firm must know it's competitors _______ in order to best sets its own

Prices

Price transparency has encouraged what type of change in the marketplace?

Proliferation of low-cost providers

When many sellers follow the market price for products the consumer sees as identical it is known as

Pure Competition

In which of the following does the competitive market NOT provided a pricing constraints for the marketer?

Pure Monopoly

In which of the following does the market set prices?

Pure competition

When many sellers follow the market price for products the consumer sees as identical it is known as

Pure competition

When a consumer is comparing the costs and benefits of substitute items, he or she is developing a

Reference value

Total ______ is equal to the unit price for a product times the quantity of it sold

Revenue

Firms that set ___ objectives believe that increased revenues will in turn lead to increases in market share and profit.

Sales

All of the following are pricing constraints except which?

Social media awareness

All of the following are key factors that influence demand for a product expect which?

Supply Factors

When a company sets a profit goal of 20% for pretax ROI, it is using which type of pricing objectives?

Target Return

The three elements influencing the demand curve are consumer_____________ consumer, ____________, and the price and availability of similar product

Tastes;Income

In an industry that has an oligopoly, price wars are likely to benefit only

The consumer

The newer a product and the earlier it is in its life cycle

The higher the price that can usually be charged

Why are customers willing to pay extra for a Kohler walk-in-tub which eliminates the need to step over the side of the tub?

The safety features enchanted the products value

An International firm that contracts with suppliers overseas would be most likely to do so for which of these reasons?

The supplier might have efficiencies and lower hourly wages, reducing production prices

Total revenue equals the product quantity sold times

The unit price

In a pure completion market, the primary purpose for advertising is

To inform buyers that product is available

The sum of fixed cost and variable costs represents

Total cost

The pricing objectives based on the quantity of product sold by a firm is also called

Unit volume

The pricing objectives known as_______ can be counterproductive if is achieved by drastic price cutting that drives down profit

Unit volume

Value takes into account both benefits and price. If price remains the same but benefits increase then

Valeu will increase

___________pricing is the practice of simultaneously increasing product and service benefits while maintaining or deceasing price

Value

At McDonald's, you can get serval items together as a meal, for less than purchasing those items separately. This is an example of

Value-Pricing

________ coat is the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold

Variable

Direct labor and materials are also known as

Variable costs

At break even point, profit is

Zero

Latonya developed a website for a local accounting firm in exchange for the company filing her income taxes. This is an example of

barter

Compared to other company objectives, the sales objective

can be translated more easily into meaningful targets for marketing managers

To increase customer value for a given price, the market must

increase perceived benefits

Movement along a demand curve implies

no changes have occurred in any demand factors except price

Which of the following would be an example of a variable cost for a publication like SHAPE magazine that is targeted to young women seeking a healthier lifestyle?

printing and binding of the magazine

Profit as calculated from the profit equation can be challenging to predict because the ________ varies with the chosen price, and can also impact the variable costs through production efficiencies.

quantity sold

Price elasticity of demand refers to

the percentage change in quantity demanded relative to a percentage change in in units sold

The unit variable costs

the total variable cost divided by the quantity