Entrepreneurship Unit 5

During which stage of the product life cycle is a business likely to try to stabilize a product's price?

• Expansion

• Introductory

• Obsolescence

• Maturity

The price function often influences the place function by determining:

• when the product is made.

• why the product is shipped.

• how the product is advertised.

• where the product is sold.

One reason why the target market of a business affects its pricing is because consumers in each target market:

• monitor the industry standard.

• monitor the industry standard.

• prefer products in the growth stage.

• judge the value of products differently.

Why would a manager of a local business keep track of the prices that similar businesses in the area are charging?

• To remain competitive

• To improve advertising

• To promote image

• To offer new services

When the costs of raw materials increase considerably, a business is likely to:

• maintain similar profit margins as its competitors.

• implement a long-term markup pricing policy.

• continue following the same marketing strategies.

• increase the selling price of a product.

Why do some new companies set their selling prices as low as they can?

• To get market share as fast as possible

• To eliminate all possible competition

• To earn a high return on investment

• To quickly make a large profit

Which of the following is an example of a business using a flexible pricing policy?

• Establishing prices that are competitive

• Lowering prices during bad economic times

• Setting prices as low as possible

• Charging prices that consumers expect to pay

What is the purpose of sales-oriented pricing objectives?

• To increase the total amount of sales income

• To create profits for the business

• To increase the return on investment

• To guarantee the survival of the business

Clyde rented an ice-cream truck in order to earn money for college in the fall. His truck rental is $200 per week and has a yearly license fee of $1 per week. It costs him $200 for 500 ice-cream bars that he plans to sell for $1.10 each. How many ice-cream bars must Clyde sell each week in order to reach the break-even point?

• 360

• 252

• 201

• 288

What primary factors do business owners consider when determining the ceiling prices of their products?

• Service fees and competition

• Promotional efforts and cost

• Interest rates and supply

• Consumer perceptions and demand