mktg 10

A company must pay each month's bills for rent, heat, interest, and executive salaries regardless of the company's level of output. This exemplifies its ________ costs.

overhead

In Viña del Mar, Chile, a large number of shops specialize in selling the same quality of seafood products along the beach frequented by tourists. No individual shop dares charge more than the going price without fearing loss of business to other shops. This exemplifies ________.

pure competition

The experience curve reveals that ________.

repetition in production enhances efficiency

Why is markup pricing most likely popular?

Sellers do not need to make frequent adjustments as demand changes.

Why is markup pricing most likely impractical?

The method ignores demand and competitor prices.

Companies can legitimately charge a higher price if ________.

consumers perceive that the company's product offers greater value

Developing an effective integrated marketing mix program involves coordinating price decisions with product design, promotion, and ________ decisions.

distribution

Herbie Inc., a firm manufacturing sandwich makers, has fixed costs of $250,000, variable costs of $20 per unit of output, and expected unit sales of 50,000 units. What is the unit cost of a sandwich maker manufactured by Herbie?

$25

The fixed cost in manufacturing a single LED monitor is $40 and the variable cost is $12. If the company expects to manufacture 5,000 monitors, the total costs would be ________.

$260,000

The total production costs at Kellner Machine Works are $87,000 out of which $45,000 represent fixed costs. Which of the following is representative of the variable costs incurred by the company?

$42,000

Which of the following is true about the demand curve?

A demand curve shows the number of units the market will buy in a given time period at different prices that might be charged.

Which of the following is true with regard to price?

Price is the sum of all the values that customers give up to gain the benefits of having a product

Which of the following is true with regard to monopolistic competition?

Sellers can differentiate their products to buyers.

Price is important to managers ________.

because a small percentage improvement in price can generate a large percentage increase in profitability

Companies with lower costs ________.

can set lower prices that result in smaller margins but greater sales and profits

As production moves up, the average cost per unit decreases because ________.

fixed costs are spread over more units

The break-even volume is the point at which ________.

the total revenue and total cost curves intersect

A pharmaceutical company in Utah recently released a new and expensive anti-ulcer drug in the market. The company justifies the high price of the drug by claiming that it is highly effective for treating all kinds of ulcers. The company also claims that the new drug will help bring down the need for invasive surgeries, an additional benefit for patients. Which of the following pricing strategies is the pharmaceutical company most likely using in this instance?

value-based pricing