MKT/421T: Marketing Wk 4 - Practice: Ch. 13, Building the Price Foundation [due Day 5]
Order the types of competitive markets from most competitive to least competitive. NOTE: The most competitive market should be the top item in your list.
1. Pure competition 2. Monopolistic competition 3. Oligopoly 4. Pure monopoly
Match the type of competitive market to its correct description.
Pure competition Many sellers who follow the market price for identical, commodity products Monopolistic competition Many sellers who compete on nonprice factors Oligopoly Few sellers who are sensitive to each other's prices Pure monopoly One seller who sets the price for a unique product
What is the demand curve?
a graph relating quantity sold and price
Break-even analysis analyzes the relationship between total revenue and total cost to determine profitability ______.
at various levels of output
Small changes in price ______.
can have comparably big effects on company profit
The Internet has resulted in which two factors that affect the competitive environment for pricing?
companies' ability to change prices frequently consumers' access to pricing information from many competitors
A pricing constraint firms face is the price that its ______ are currently charging and likely to charge in the future.
competitors
Factors that limit the range of prices a firm may set are known as pricing ______.
constraints
Legal and regulatory issues and consumer demand are pricing ______ that limit what a company can charge for its products.
constraints
Which three items would be subtracted from the list price in order to arrive at the final price of a product?
discounts trade-ins rebates
According to the price equation, the actual price is the list price less ______, plus extra fees.
incentives and allowances
Pricing objectives involves specifying the role of price in what two areas of an organization?
its marketing plans its strategic plans
Current profit ______ and target ______ are two strategies used by firms that are pursuing a profit pricing objective.
maximization; return
What two strategies can be used as part of a firm's profit objectives?
maximizing current profits target return
On a demand curve, one of the axes represents the price of a product while the other represents the ______.
maximum units sold
Pricing ______ involve specifying the role of price in an organization's marketing and strategic plans.
objectives
Pricing ______ frequently reflect corporate goals, while pricing ______often relate to conditions existing in the marketplace.
objectives; constraints
What element of the marketing mix has a unique role in that it is the place where all other business decisions come together?
price
What two elements are shown on a demand curve?
price quantity sold
The percentage change in quantity demanded relative to a percentage change in price is known as ______.
price elasticity of demand
Break-even analysis can help evaluate the impact of changes in ______ and ______ on ______.
price; costs; profit
Price elasticity of demand is expressed as percentage change in ______ divided by the percentage change in ______.
quantity demanded; price
Total ________ is equal to the unit price for a product times the quantity of it sold.
revenue
Why must a marketing manager consider pricing objectives and constraints?
to narrow the range of choices among the variety of pricing strategies
Unit price times quantity sold equals ________.
total revenue
According to the profit equation, profit equals ______.
total revenue - total cost
Profit = (____ x quantity sold) - (fixed cost + variable cost)
unit price
The ratio of perceived benefits to price is a product's _______.
value
______ is the ratio of a product's perceived benefits and its price.
value
Total cost is the sum of which of these?
variable cost fixed cost
Total cost represents ______.
variable costs plus fixed costs
