Markets And Consumers Terms Test 3

Front 1

Variable costs

Back 1

the costs of production (raw and processed materials, parts, and labor) that are tied to and vary depending on the number of units produced

Front 2

Fixed costs

Back 2

costs of production that do not change with the number of units produced

Front 3

Average fixed cost

Back 3

the fixed cost per unit produced

Front 4

Total costs

Back 4

the total of the fixed costs and the variable costs for a set number of units produced

Front 5

Break-even analysis

Back 5

a method for determining the number of units that a firm must produce and sell at a given price to cover all its costs

Front 6

Break-even point

Back 6

the point at which the total revenue and total costs are equal and beyond which the company makes a profit; below that point, the firm will suffer a loss

Front 7

Contribution per unit

Back 7

the difference between the price the firm charges for a product and the variable costs

Front 8

Marginal analysis

Back 8

a method that uses cost and demand to identify the price that will maximize profits

Front 9

Marginal cost

Back 9

the increase in total cost that results from producing one additional unit of product

Front 10

Marginal revenue

Back 10

the increase in total income or revenue that results from selling on additional unit of a product

Front 11

Cultural values

Back 11

a society’s deeply held beliefs about right and wrong ways to live

Front 12

Collectivist cultures

Back 12

cultures in which people subordinate their personal goals to those of a stable community

Front 13

Individualist cultures

Back 13

cultures in which people tend to attach more importance to personal goals than to those of the larger community

Front 14

Prestige products

Back 14

products that have a high price and that appeal to status-conscious consumers

Front 15

Price elasticity of demand

Back 15

the percentage change in unit sales that results from a percentage change in price

Front 16

Elastic demand

Back 16

demand in which changed in price have large effects on the amount demanded

Front 17

Inelastic demand

Back 17

demand in which changes in price have little or no effect on the amount demanded

Front 18

Cross-elasticity of demand

Back 18

when changes in the price of one product affect the demand for another item

Front 19

Price elasticity of demand formula

Back 19

percent change in quantity/percent change in price

Front 20

Price elasticity of demand =

Back 20

(Q2-Q1)/Q1 / (P2-P1)/P1

Front 21

Markup on cost formula

Back 21

price=total cost(total cost X markup percentage)

Front 22

Fixed cost per item=

Back 22

fixed cost/max quantity able to produce

Front 23

Single sourcing

Back 23

the business practice of buying a particular product from only one supplier

Front 24

Multiple sourcing

Back 24

the business practice of buying a particular product from several different suppliers

Front 25

Reciprocity

Back 25

a trading partnership in which two firms agree to buy from one another

Front 26

Outsourcing

Back 26

the business buying process of obtaining outside vendors to provide goods and services that otherwise might be supplied in-house

Front 27

Crowdsourcing

Back 27

a practice in which firms outsource marketing activities (such as selecting an ad) to a community of users

Front 28

Reverse marketing

Back 28

a business practice in which a buyer firm attempts to identify suppliers who will produce products according to the buyer firm’s specifications