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Exam 20: Pricing Concepts

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Question 41

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If fixed costs = $6,000,selling price = $10,and variable costs per unit = $5,what is the breakeven point in units and in dollar sales volume?

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Question 42

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Price is a key element in the marketing mix because it relates directly to

A) the size of the sales force.
B) the speed of an exchange.
C) quality controls.
D) the generation of total revenue.
E) brand image.

F) A) and B)
G) A) and C)

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Question 43

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Compare and contrast price and nonprice competition.Give examples of firms that compete on a price basis and on a nonprice basis.

Seasonal discounts provide price incentives to customers during peak selling seasons.

Pricing decisions should be based on the marketer's previous marketing strategies for other successful products and on intuition.

Suppose Tommy Hilfiger is introducing a new line of men's ties.The designer believes that the target market for these ties comprises men who are very status-conscious.In keeping with this assessment,department stores selling the ties should

If the product price is $100,average variable cost $40 per unit,and the total fixed costs are $120,000,what is the breakeven point?

Provisions of the Robinson-Patman Act,as well as those of the ____,limit the use of price differentials.

If Carnival Cruise Lines increased the price of its seven-day cruise package by 10 percent and,as a result,experienced a 20 percent decline in customer bookings,Carnival's demand would be

Safe Auto advertises its automobile insurance as "minimum coverage for minimum budgets." Safe Auto is engaging in

Justin,a sales representative for Serta Mattress manufacturers,phones Kirk of Southside Furniture to inform him that if he will increase his recent order of 15 mattress sets to 20,he will receive a 14 percent price reduction.This offer is due to a recent overstock condition at the factory and will not be available in the future.The discount offered here is

What are the differences among value-conscious,price-conscious,and prestige-sensitive customers?

For most firms in the United States,demand curves are

A deduction from list price for purchasing large quantities aggregated over a stated period of time is a

Isabella is a product manager for The Container Store,a retailer of plastic bins and other storage containers.Sales have been declining in the past nine months and her management team is pressuring her to compete based on price discounts.However,Isabella is aware of the dangers associated with engaging in price competition.She knows that competitors can also change prices quickly and aggressively,which can result in a(n) ____ that will be harmful to both companies.

A certain location of O'Charley's Restaurant has annual fixed costs of $200,000.If an average tab at the restaurant is $60 and the variable costs per tab is $20,how many groups of customers must O'Charley's serve per year in order to break even?

Producers commonly provide discounts off list prices to intermediaries.

ACE Electronics introduces a new voice-activated personal computer that no longer requires a keyboard.ACE charges the high price of $11,000 per unit,thus generating large profits because it has a 20 percent market share.ACE's major problem in the future will most likely be

If a company increased its price from $100 to $120 and the quantity demanded fell by 40 percent,the price elasticity of demand for this product is

Discuss the role of product costs in setting prices.