Mini Test 7

Last year, BruceCo sold 1000 coffee cups for $10 each. If the cost for each cup was $4.70, what was the average revenue for BruceCo?

$10

Last year, BruceCo sold 1000 coffee cups for $10 each. This year, the company is planning on selling 1500 coffee cups. In order to cover the additional investment they will charge $10.50 for the first 500 cups, $10.25 for the second 500 cups and $10 for the last 500. Each cup costs $4.70 to produce. What is the marginal revenue for the 1125th cup?

$10.00

Last year, BruceCo sold 1000 coffee cups for $10 each. This year, the company is planning on selling 1500 coffee cups. In order to cover the additional investment they will charge $10.50 for the first 500 cups, $10.25 for the second 500 cups and $10 for the last 500. Each cup costs $4.70 to produce. What is the average revenue?

$10.25

Last year, BruceCo sold 1000 coffee cups for $10 each. If the cost for each cup was $4.70, how much profit did BruceCo make?

$5,300

Last year, BruceCo sold 1000 coffee cups for $10 each. This year, the company is planning on selling 1500 coffee cups. In order to cover the additional investment they will charge $10.50 for the first 500 cups, $10.25 for the second 500 cups and $10 for the last 500. Each cup costs $4.70 to produce. What is the marginal profit for the 1125th cup?

$5.30

Last year, BruceCo sold 1000 coffee cups for $10 each. This year, the company is planning on selling 1500 coffee cups. In order to cover the additional investment they will charge $10.50 for the first 500 cups, $10.25 for the second 500 cups and $10 for the last 500. Each cup costs $4.70 to produce. What is the average profit if they sell all 1500 cups?

$5.55

BruceCo is planning on selling coffee cups for $14 each. The company can buy the cups for $2.00 and have them printed for $1.50. The package costs fifty cents. There is a one-time set up charge from the printer of $1,000. In order for the project to go forward, the company needs to show a $10,000 profit. How many cups of coffee will BruceCo have to sell in order for this project to be acceptable?

1100

BruceCo is planning on selling backpacks for $100 each. The company can buy the backpacks for $30.00 and have them customized for $20.00. There is a one-time set up charge of $1,000 for customization. How many backpacks will BruceCo have to sell in order to break even?

20

BruceCo is planning on selling backpacks for $100 each. The company can buy the backpacks for $30.00 and have them customized for $20.00. T There is a one-time set up charge of $1,000 for customization. In order for the project to go forward, the company needs to show a $10,000 profit. How many backpacks will BruceCo have to sell in order for this project to be acceptable?

220

Which of the following situations is probably illegal price discrimination as determined by the Robinson-Patman Act?

A gasoline refinery sells gasoline to its dealers for 50 cents less than to independent dealers because it doesn't want independent dealers selling gasoline at lower prices than the companys dealer network. Correct

Which of the following is tactics is most likely to encourage customers to pay your asking price for a product.

A price tag that looks like it was professionally printed

Price elasticity is the slope of the demand curve. When price elasticity is HIGH?

A small change in price will lead to a large change in quantity demanded.

For many products such as candy bars, there is a price consumers expect to pay for the product. Companies using the _____________ to setting prices will use this price as a basis for positioning their products as prestige or value brands?

Above or below approach

Which of the following is an example of a question that can be answered using breakeven analysis?

All of these are questions that can be answered using break even analysis

An inverse demand curve is usually associated with luxury or prestige goods. With an inverse demand curve, within a certain range of prices...

An increase in price will lead to an increase in the quantity demanded

Bruce went into an appliance store to purchase a 32" LCD tv for $799 as advertised in the local paper. When he got to the store, he was told that all of the $799 tv's had been sold, but there was a 32" LCD tv available for $899 that he could purchase today. Bruce may have been a victim of?

Bait and switch pricing

Hewlett Packard makes a variety of inkjet printers for personal computers. You can buy a basic 'all in one' printer that scans, copies and prints for less than $99. Replacement ink cartridges from Hewlett Packard cost between $30 and $60 depending on whether it is black and white or color ink. This is an example of _____________?

Captive pricing

The Senseo coffee maker is a machine that makes one cup of coffee at a time from specially prepared 'pods' of coffee. You can get the coffee maker at a very reasonable price. However, you can only get refill pods from the manufacturer and they tend to be expensive. This is an example of?

Captive pricing

Demand factors are factors that affect consumers' willingness and ability to purchase products. Demand factors such as __________ affect what consumers ARE ABLE to buy?

Consumer income

_______________ is used in situations where the final cost of a good or service may not be available at the time the agreement is reached?

Cost plus pricing

The disadvantage to the __________ to setting prices is that it doesn't take into account whether customers are willing to pay the price your need to charge?

Cost-based approach

If the demand curve for a product shifts outward then?

Customers will buy more at every price point

The __________ to setting prices weighs consumer tastes and preferences more heavily than costs and profits.

Demand-based approach

Bruce ordered a test bank from teachersupplies.com. The cost of the package was $39.95 plus sales tax (you are responsible for California sales tax, even if you order online). He chose to have the product shipped via UPS ground because it was the least expensive shipping option. Teachersupplies.com is using a ___________ approach to geographic pricing?

FOB factory

In automating a manufacturing plant, which of these would definitely increase in the short run?

Fixed cost

____________ are the costs of production that do not change with the number of units produced?

Fixed costs

The biggest drawback to every day low pricing is?

It is easy for competitors to offer their products at a price slightly lower than yours.

Many airlines advertise low prices on the internet. When you actually book the ticket, you may find that there are destination charges, service, fees and other costs that significantly increase the cost of the ticket. The airlines use this _________ tactic to make their prices appear to be lower to customers who are comparing prices.

Multiple price

Many television infomercials advertise a product at a very low price. After you order the product, you find there is a fairly substantial shipping and handling charge. When you figure in the extra charges, the product may be more expensive than other, similar products that you were considering. This is an example of a ________tactic?

Multiple price

In many market situations, such as an oligopoly or monopolistic competition, there is a very strong expectation of what the price for a product should be. In these situations, many businesses engage in ____________ by using advertising, free-product offers or bonus packaging to differentiate their product.

Non-price competition

Experience has shown that customers perceive a price of $99.99 to be significantly lower than a price of $100. The pricing strategy that takes advantage of this phenomenon is called ___________

Odd-even pricing

The ____________ approach to new product pricing sets prices low in order to gain market share and discourage competitors from entering the market?

Penetration

_________ is what is given up in an exchange to acquire a good or service

Price

Colgate Palmolive created a special package that included a free regular-sized tube of toothpaste when you purchase a family-sized tube of toothpaste at the regular price. This is an example of?

Price bundling

Sometimes companies will sell a product below their cost of production for a short period in order to gain market share or to reduce excess inventory. This ____________ can be risky, especially if competitors match the reduced price making it difficult to raise prices back to long-term profitable levels.

Price floor pricing

For companies operating in an oligopoly market structure, prices tend to be very stable. In these situations, the company with the largest market share might raise its prices in hopes that other, smaller companies will follow. If this happens, the price will increase. This is called the ____________ to setting prices?

Price leadership approach

_____________ are factors that limit the range of prices a firm may set for its products?

Pricing constraints

The market structure in which companies have the MOST flexibility in setting prices is?

Pure monopoly

Eseffisue Company has developed a portable solar-powered global positioning (GPS) device. There is a high demand for the product and until now, there wasn't anything like it on the market at any price. The company has a patent and the most important attribute for a GPS device is quality. Eseffisue Company should use a ____________ approach to pricing this product?

Skimming

The ____________ approach to new product pricing sets prices high in order to recover development costs more quickly?

Skimming

The Broyhill furniture company designed a sofa that retailers could sell for $699 and still make a profit. This was because retailers had told the company they needed a promotional sofa that would cost less than the $1000 or more for a typical sofa. They would feature the promotional sofa in their advertisements to bring customers into the store. This is an example of?

Target profit pricing

What do we mean when we speak of the price/value heuristic?

That in general, people perceive a product with a higher price to be a better product

The San Francisco Municipal Railway (MUNI) Charges $1.50 for an adult passenger. Once you have purchased a fare (and taken a transfer as proof of payment) you can ride anywhere on the system for the next 90 minutes. This is an example of __________ geographic pricing.

Uniform delivered price

When marginal revenue is NEGATIVE and prices decrease?

Unit sales increase

According to the information in class, the fundamental issue in geographic pricing tactics is?

Whether the buyer or the seller pays for the cost of transporting the product to the customer

It has been said that no two people on an airplane pay the same price for a ticket. Prices tend to be lower if you are willing to book you trip well in advance and tend to be much higher if you have to book your trip on short notice. A non-refundable ticket costs less than a refundable ticket. Airlines use this ___________ in order to maximize the revenue they earn from each flight?

Yield management pricing

Price elasticity is the slope of the demand curve. When price elasticity is LOW?

You can increase revenues by increasing prices

The Bay Area Regional Transit Authority (BART) operates a light rail system in the bay are. Passengers purchase a ticket with a magnetic strip that keeps track of how much money is on the ticket. The cost for a ride is anywhere from about $3 to about $10 depending on how far you are going. You can go to any of the downtown stops for the same price. BART is using ___________ geographic pricing?

Zone delivered price

According to your instructor, which of the following pricing objectives is commonly used by publicly traded American firms?

maximizing current profit

Which of the following statements about the relationship between price and cost is FALSE?

price has to be higher than total cost.

In order for a firm to have an increase in market share as a pricing objective, it is assumed that the firm has?

profits