Lect 6 ProdMana

What is the primary determinant of the price for a good or service, according to the theory of price?

• Production costs 

• Consumer preferences

• Supply and demand relationship

• Government regulations

When does a market achieve equilibrium, according to the theory of price?

• When supply exceeds demand

• When demand exceeds supply 

• When there is a balance between supply and demand 

• When prices are constant over time

How does the concept of elasticity of demand relate to price changes?

• It measures the sensitivity of supply to price changes 

• It measures the sensitivity of demand to price changes

• It determines the optimal price for a product 

• It regulates government interventions in pricing

What is the purpose of a demand curve?

• Illustrating the relationship between prices and supply

• Illustrating the relationship between prices and demand 

• Determining the optimal market price 

• Regulating government pricing policies

What is the role of a supply curve in microeconomics?

• Illustrating the relationship between prices and supply

• Illustrating the relationship between prices and demand

• Determining the optimal market price 

• Regulating government pricing policies

What is the equilibrium point on a graph showing both demand and supply curves?

• Where prices are highest

• Where demand is highest 

• Where supply is highest 

• Where the two curves intersect

What is the objective of prestige pricing?

• Attracting a larger customer base 

• Setting prices based on production costs 

• Suggesting quality and exclusivity through higher prices 

• Regulating government pricing policies

How can companies use the enterprise tier strategy for prestige pricing?

• By creating an imaginary high-priced tier to anchor lower-priced offerings 

• By reducing the price of all product tiers equally 

• By offering additional features in the high-priced tier 

• By limiting the availability of the high-priced tier

What is a crucial factor for effectively using prestige pricing?

• Offering frequent discounts to attract more customers 

• Building product value and delivering on promises 

• Constantly changing product prices to match competitors 

• Implementing high production costs to justify higher prices

How can the appearance of published prices influence customer perception?

• Ending prices in 0’s or 5’s signals lower quality 

• Using decimal pricing suggests higher value 

• Avoiding round numbers indicates better quality 

• Ending prices in 9’s implies a bargain