Chapter 11
Demand-oriented, cost-oriented, and profit-oriented approaches can be used to set a(n) ________ price level for a product.
Approximate
A ---- analysis is a technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output. (one word each blank)
Break-Even
A ________ visually shows that the total revenue curve and the total cost curve intersect at a point of zero profit.
Break-even
The Internet has resulted in which two of the following that affect the competitive environment for pricing?
Companies' ability to change prices frequently Consumers' access to pricing information from many competitors
Select all of the following that are common approaches to setting an approximate price level for a product.
Demand-oriented Competition-oriented Cost-oriented
Uber and Lyft customers often complain about the practice of "surge" or "prime-time" pricing used by these companies during periods of peak demand. This is an example of a __________ pricing policy.
Dynamic
Pricing ________ frequently reflect corporate goals, while pricing ________ often relate to conditions existing in the marketplace.
Objectives Restraints
Organizations using ________ pricing set the initial price low for the introduction of the new product to appeal immediately to the mass market.
Penetration
A firm must know its competitors' ________ in order to best set its own.
Price
The money or other considerations exchanged for the ownership or use of a product or service is its
Price
________ represents the vertical axis of a demand curve graph.
Price per unit
of demand is a measure of how sensitive consumer demand and the firm's revenues are to changes in the product's price. (one word)
Price-elasticity
Patents and limited competition reduce ________, making high prices possible for technology products early in their life cycles.
Pricing constraints
By focusing on target profit pricing or target return pricing, a firm is using a ________ pricing approach.
Profit oriented
Which two are profit-oriented approaches to setting a price?
Target-profit Target return
The newer a product and the earlier it is in its life cycle, ______.
The higher the price can usually be charged
Break-even analysis analyzes the relationship between which two at various levels of output?
Total cost Total revenue
Break-even analysis analyzes the relationship between total revenue and total cost to determine profitability
Various levels of output
What is target pricing?
estimating the price that the ultimate consumer would be willing to pay for a product, then working backward through markups taken by retailers and wholesalers to determine wholesale price
Total revenue = unit _____ x quantity ______
price; sold
Price elasticity of demand is expressed as percentage change in ________ divided by the percentage change in ________.
quantity demanded; price
Price elasticity of demand refers to
the percentage change in quantity demanded relative to the percentage change in price.
Price-elasticity of demand refers to
the percentage change in quantity demanded relative to the percentage change in price.
