Chapters 14: Pricing concepts for capturing value

Total cost is ______. variable costs minus fixed costs fixed costs divided by variable costs variable costs plus fixed costs variable costs times fixed costs

variable costs plus fixed costs

The percentage change in the quantity of one product demanded compared with the percentage change in price in another product is called ______-price elasticity.

cross

Competition, channel members, costs, customers, and company objectives are the five critical components of ______. quality pricing promotion variety

pricing

The _____ is fixed costs plus the sum of the variable costs. total cost net contribution per unit profit margin break-even point

total cost

Suppose the variable cost per unit of a firm is $10, fixed costs are $1,000,000, and expected sales are 50,000 units. If the firm wants to achieve a markup of 10% of cost, then the target return price of the firm is _____. $2 $12 $10 $8

$12

The five C's of pricing.

1. competition 2. cost 3. company objectives 4. customers 5. channel members

Select all that apply Assuming the economy and other factors stay the same, a downward-sloping demand curve for a product shows which of the following? As price increases, demand decreases. As price decreases, demand decreases. As price decreases, demand increases. As price increases, demand increases.

As price increases, demand decreases. As price decreases, demand increases.

Select all that apply Which of the following do you need to know to calculate target return price? (Select all that apply.) Fixed costs Expected unit sales Break-even point Variable costs

Fixed costs Expected unit sales Variable costs

Break-even analysis examines the relationships between which of the following? Price Cost Value Unions

Price Cost

Select all that apply Which of the following accurately characterize demand curves? They relate demand to prices while assuming everything else remains unchanged. They show how much consumers will demand during a specific period at different prices. They are identical for all products and services in a given industry. They are completely accurate prediction models.

They relate demand to prices while assuming everything else remains unchanged. They show how much consumers will demand during a specific period at different prices.

Select all that apply Channel members include which of the following? Wholesalers Manufacturers Consumers Retailers

Wholesalers Manufacturers Retailers

A useful technique that enables managers to examine the relationships among cost, price, revenue, and profit over different levels of production and sales is called ______. cross-price elasticity break-even analysis fixed costs cost-benefit analysis

break-even analysis

The graph that shows how many units of a product or service consumers will want during a specific period at different prices is known as the ______ curve. price versus sales demand supply consumer

demand

For most products, demand increases as the price decreases. Because of this general trend, demand curves usually have a(n) ______ slope. upward downward horizontal vertical

downward

When a 10% decrease in price produces more than a 10% increase in quantity sold, the product or service is responsive to price changes and is considered to be ______. in high demand unaffected inelastic elastic

elastic

True or false: A firm with a primary objective of very high sales growth will have the same pricing strategy as a firm with a primary objective of being a quality leader.

false

When the price of DVD players drops, theoretically based on demand elasticity, the demand for DVDs is likely to ______. decrease remain unchanged first increase then decrease increase

increase

The overall sacrifice a consumer is willing to make to acquire a product or service is known as ______.

price

Select all that apply If McDonald's reduces the price of a Big Mac by 25% and sales increase by more than 50%, the firm could describe demand as which of the following? price sensitive price insensitive elastic inelastic

price sensitive elastic

Price is defined as...

the overall sacrifice a consumer is willing to make to acquire a specific product or service

The _____ is fixed costs plus the sum of the variable costs. net contribution per unit break-even point total cost profit margin

total cost