Week 11

What sets the ceiling for product prices?

• product manufacturing costs

• sellers' perceptions of the product's value

• customer perceptions of the product's value

• variable costs

________ pricing uses buyers' perceptions of value as the key to pricing

• Customer value-based

• Cost-based

• Time-based

• Markup

Factors a company considers in setting its price include all of the following EXCEPT ________.

• competitors' strategies and prices

• product costs

• overall marketing strategy and mix

• value of the product on the pre-owned market

Which of the following involves introducing less-expensive versions of established, brand name products?

• markup pricing

• good-value pricing

• time-based pricing

• cost-based pricing

Costs that change with the level of production are referred to as ________.

• fixed costs

• variable costs

• target costs

• total costs

As production moves up, the average cost per unit decreases because ________.

• variable costs decrease

• of increasing diseconomies of scale

• fixed costs are spread over more units

• overhead costs decrease

Cost-plus pricing ________.

• is a complex pricing method

• involves pricing that accurately reflects production costs

• involves adding a standard markup for profit

• aims at breaking even on the costs of making and marketing a product

If demand changes greatly with price, the demand is inelastic.

• TRUE

• FALSE

If demand is elastic rather than inelastic, sellers will consider lowering their prices.

• TRUE

• FALSE

________ refers to a measure of the sensitivity of demand to changes in price.

• Price elasticity

• A demand curve

• Price-value equation

• Marginal utility