CU- Price Unit Review

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Premium Pricing

A new company is offering a luxury. The company wants to establish itself as an elite brand. What strategy of pricing should be used?

Prestige

A product priced at $100 creates the perception of a ___________ product.

Odd/Even Pricing

A product priced at $119.99 as opposed to $120 is an example of:

$37.50

A shoe store uses a 50% markup on cost. Find the selling price of a pair of shoes the retailer paid $25 for.

Bargain

A watch priced at $79.99 is using odd pricing to convey a:

Total utility will exhibit a falling rate as more units are consumed

According to the law of diminishing marginal utility:

Consumers will substitute other products for the one whose price has risen.

An increase in the price of a product will reduce the amount of it purchased because:

Demand

Analyzing and using the highest acceptable price consumers are willing to pay would describe _______-based pricing.

Allowance

Bob buys a new phone, but trades in his old phone to receive a discount. This would be an example of which type of discount pricing?

Law of Diminishing Marginal Utility

Consumers will only purchase so much of a product, even when the price is low. This statement conveys the:

Variable Costs

Costs which generally increase at a constant rate relative to output are known as:

Inelastic Demand

Demand for a product does not decrease based on a rise in its price. This product has:

Penetration Pricing

During the introduction stage of a product, what is the pricing strategy used to build hype and a large customer base?

Loss Leader

Gabby's Clothing is having a sale where jeans are priced at $25. At this price, the business is losing money, but hopes to earn money by getting customers in the door. In this example, the jeans are a:

Pricing

Gaining market share, challenging competitors, and maximizing profits are objectives of:

Loss Leader Pricing

If a company wants to generate store traffic without a concern for profit, which pricing strategy should be considered?

Product Mix Pricing

If a marketer combines several products into a "bundle" and sells it under one price, slightly cheaper than purchasing all the products separately, this would be an example of:

Inelastic; Elastic

If a product is unique, it is likely to have ________ demand. However, a product with many substitutes will have ______ demand.

Elastic

If a small change in price is accompanied by a decrease in quantity demanded the product's demand is said to be:

Supply

In perfect economic theory, when the price of a product rises, its ___________ also rises because the product is more profitable to provide.

Target market

Knowing the objectives for a company's pricing decisions and keeping the ___________ in mind guides marketer's decisions about pricing strategies.

Introductory

Many businesses choose to initially price products low or high during the __________ phase of a product.

Low: high markups

Many producers who use captive-product pricing set the price of the main product ________ and set ________ on the supplies necessary to use the product.

By-Product

Material that is leftover and that a business cannot use from their original product, but can use it to make a different product, or sell it to someone who can use it.

During the development or introductory phase of a product's life cycle

Penetration pricing and price skimming are marketing strategies commonly implemented:

Prestige Pricing

Prices which are set high to project status, high quality, or exclusivity equate to:

Price Discrimination

Selling the same product at different prices to different buyers.

A designer line of purses and shoes.

Skimming pricing would be most effective when selling:

Equilibrium Point

Suppliers are selling all the goods they have produced, and consumers are getting all the goods they demand. This is known as _____________, the point where allocation of goods is the most efficient.

Price

The amount of money expected, required, or given in payment for a product.

Cash Discount

The discount given when a business pays within a certain time period.

Fall

The law of demand states that when prices rise, demand will:

Growth

The phase of the product life cycle when production is optimized and manufacturing becomes as efficient as possible.

Marketing Mix

The pricing function is an integral part of the company's:

Markup Pricing

This pricing method is commonly used by retailers and wholesalers and is a form of cost-based pricing.

Law of Diminishing Marginal Utility

This refers to the decline of satisfaction per additional unit being added to consumption.

Price Fixing

Two business competitors have agreed to set the dollar amount of gas at a certain point. These businesses are illegally practicing:

Competition Based Pricing

Uses prices of "like" products from competitors as a benchmark instead of considering their own costs or the customer demand.

Price Skimming

What pricing technique includes the business setting high prices to initially establish an elite audience?

Cost-Based Pricing

When a fixed sum or a percentage is added to the cost of the product to arrive at its selling price.

Break-Even Point

When a product's revenue equals the total costs and expenses to produce the product, this is known as the:

Competition

When setting prices, Metro Electronics must consider factors in its external environment such as government regulation and:

Electronics

Which of the following goods would you expect to have the highest elasticity of demand?

Predatory Pricing

Which pricing strategy would be attempted by unethical marketers to price its products way below its competitors in hopes of driving the competition out of business?

Psychological Pricing

_____ creates an illusion for customers and are often based on a buyer's motivation for making a purchase.

Value

_______ is the extent to which a good or service is perceived by its customer to meet his or her needs or wants, measured by customer's willingness to pay for it.

Demand

____________ is how much of a product or service is desired by qualified buyers at a specific price.

Utility

_____________ is the total satisfaction received from consuming a good or service.


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