Marketing - Price Review

The primary goal of pricing is to earn a profit.

• True

• False

It cost Spohn-Mart $4 to purchase a three pack of socks. He will markup the socks 50%. What is the markup amount?

• $.50

• $5.00

• $2.00

• $4.00

If the markup on the socks is $2, what is his retail price if he purchased the socks for $4?

• $8

• $6

• $2

• $4

Costs of operating a business (ex. electric, rent, insurance)

• unit cost

• price

• revenue

• expenses

The cost paid per item to be resold by a retail business or the cost to produce an item in manufacturing.

• unit cost

• markup

• net profit

• gross profit

Revenue - Cost of Goods Sold =

• Retail Price

• law of supply and demand

• Expenses

• Gross Profit

Money brought into a business through the sale of goods and services.

• expenses

• profit

• revenue

• margin

Your unit cost for a product is $4, for each of those products sold you have expenses of $1 per item. You sell this product for $10 each. What is your net profit per product sold?

• $15

• $6

• $5

• Net profit cannot be caluclated with this information

This pricing method, commonly used in retail, begins with the unit cost of an item and adds a markup to that cost to determine the price.

• competition based pricing

• demand / value based pricing

• cost based pricing

• price gauging

When utilizing a competition based pricing strategy, you will always attempt to charge a lower price than your competitors.

• False

• True