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49 Cards in this Set
- Front
- Back
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What is price? |
value that customers give up or exchange to obtain desired products |
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What explains this formula: P=R-C? |
profit = revenue - cost |
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What explains at what condition the firm will maximize its profits? |
marginal revenue = marginal cost |
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What explains at what condition the firm will maximize its volume? |
firm tries to increase revenue |
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How many P's are left if the firm's pricing objective is to meet competition? |
3 |
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The pricing strategy used by Tiffany jewelry is what? |
prestige |
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When Boy Scouts charges $20 for a can of popcorn to raise funds for the local troops, their pricing obj is what? |
profit maximization
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What is the reason for imposing high taxes on tobacco and alcohol? |
market suppression |
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Offering public transportation free of charge in Portland, OR is to _______ |
market incentives |
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What is demand? |
the quantity of a product that people will buy depends on its price |
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Why does the demand curve usually slope downwards? |
the higher the price, the fewer goods consumers will demand |
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What is supply? |
quantity of a product that will be offered for sale at difference prices at specified time period |
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Why does the supply curve usually slope upwards? |
at higher prices, manufacturers will obtain more resources and produce more product sell |
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Which of the following describes what happens when supply meets demand? |
equilibrium price |
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Which industry sectors exemplify pure competition? |
stock market |
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Which industry sectors exemplify oligopoly? |
petroleum companies |
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Which of the following is an example of monopoly? |
utilities in local area |
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consumers are willing to pay more for pantene even pantene is commodity (shampoo) as it participates in which? |
monopolistic competition |
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The price of high-end products in the beginning is often very high to recover fixed cost rapidly and earn initial high profits. It is called: |
skimming pricing |
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If a company introduces a new product at a low price so as to capture a large market share, it is called: |
penetration pricing |
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Trying to match your competitors' prices is called: |
competitive pricing |
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What is rebate? |
refunds of a portion of purchase price |
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The cash discount from a $1000 invoice when the terms are 5/10 net 30 if the bill is paid within the first week after receipt: |
$50 |
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Selling toilet paper at a stated amount per sheet is an example of what? |
unit pricing |
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When product is priced $999.99 instead of $1000, it is an example of what? |
odd pricing |
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When honda cars are sold at price levels, $15,000, $25,000, and $35,000, its pricing policy is: |
product-line pricing |
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Buy one and get the second half off is: |
promotional pricing |
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Which of the following is auction site that you can negotiate on prices? |
ebay.com |
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government agencies need to use taxpayer dollars efficiently, therefore, many projects have to undergo: |
competitive bidding |
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Price stability is difficult to achieve for international marketers due to what? |
exchange rate fluctuation |
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What is market-differentiated pricing |
flexible pricing according to local marketplace conditions |
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What is transfer pricing? |
price of moving goods between different profit centers within the same company |
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A chinese comp co transfers laptops costing $100 to make to its US subsidiary for a transfer price of $200. The US subsidiary sellls the laptops to retailers for $250 each and spends about $50 per laptop on promotion and distribution expense. The chinese manufacturer _________ |
makes a $100 profit on which it pays only chinese taxes |
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If the internet division of Schwab charges on $30 per trade, compared to the parent company charging $65 per trade using brokers, it is what? |
cannibalization |
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What describes how bots help consumers in shopping? |
search programs that act as comparison shopping agents |
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Total cost = ______ + ______ |
fixed cost + variable cost |
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Revenue = _____ x _____ |
price x quantity |
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What explains why the MC curve slopes downwards and then goes up again? |
the additional cost of producing addition unit of product decreases until capacity is reached, then increases |
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What explains why the MR curve slopes downwards? |
the additional revenue generated from the selling of an additional output is usually higher |
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What explains in words why profit maximizes when MR = MC? |
profit is the highest when the additional revenue generated from selling an additional unit of product is equal the additional cost of producing it |
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What is the formula for elasticity of demand? |
change in percentage quantity demanded/change in percentage in price |
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What is the price elasticity of demand for eggs, if 20% increase in price result in 5% decrease in quantity of eggs demanded? |
25% |
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If gasoline demand is inelastic, what is its elasticity of demand? |
smaller than 1 |
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When the product occupies a very small portion of the consumer budget, its demand is likely to be what? |
inelastic |
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in the long run, all demands are: |
elastic |
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What is cost-plus pricing? |
cost per unit plus markup |
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What is the break-even pricing of the following: fixed cost $200,000, variable cost $40, and price is $90? |
4000 |
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How many units does the firm need to sell if it wants to have a profit of $100,000 based upon the following info: fixed cost $200,000, variable cost $40, and price is $90 |
6000 |
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How yield management helps hotel maximize its revenues? |
limiting early sales of lower-priced products |
