Ch.19 Mindtap MKTG 409 Price – Flashcards
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Price is defined as:
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the value paid for a product in a marketing exchange
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Price competition exists when
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consumers have difficulty distinguishing competitive offerings and marketers emphasize low prices.
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Which of the following statements about price and nonprice competition is true
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To engage in nonprice competition, a company must be able to differentiate its products from competitors' products on quality and features.
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Under which of the following conditions is nonprice competition effective?
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When the firm offers excellent customer services
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The demand curve:
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is a graph of the quantity of products expected to be sold at various prices, other factors being constant.
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Which of the following statements is true of the demand curve for prestige products
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Prestige products tend to sell better at high prices than at low ones
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________ is the percentage change in quantity demanded relative to a given percentage change in price
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Price elasticity of demand
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Which of the following products is characterized by highly elastic demand?
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Sports cars
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When gasoline prices rose by 3 percent during the recession, the demand for gasoline fell by a margin of 12 percent. The price elasticity of demand for gasoline is ________.
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- 4
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The extra cost a firm incurs when it produces one more unit of a product is called the ________.
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Marginal cost
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The monthly electricity costs for a cold storage facility are the same whether it is operated at full capacity or at lower capacities. What type of production cost does electricity represent?
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Fixed cost
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A toy store stands to gain $5 if it manages to sell one more action figure before it shuts shop for the day. This represents the store's ________.
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Marginal revenue
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Profit at its highest when:
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marginal cost and marginal revenue are equal.
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The point at which the costs of producing a product equal the revenue made from selling the product is called the manufacturer's ________.
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Break even point
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Which of the following relations is used to determine the break-even point in units?
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Break-even point = (fixed costs) / (per-unit contribution to fixed costs)
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A price developed in the buyer's mind through experience with the product is known as a(n) ________.
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Internal reference price
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An external reference price is:
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a comparison price provided by others, such as retailers or manufacturers.
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Which of the following characteristics of a product is a value-conscious consumer most likely concerned about?
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Both price and quality
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Which of the following characteristic of prestige-sensitive buyers
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They focus on purchasing products that signify prominence and status.
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A leading oil company faced a lawsuit for apparently dividing stations into zones and charging different rates to each zone for gasoline. This practice is known as ________.
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Price discrimination
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________ refers to a reduction off the list price given by a producer to an intermediary for performing functions like transportation, warehousing, selling, and providing credit.
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Trade discount
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________ are price reductions granted for turning in a used item when purchasing a new one.
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Trade in allowances
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Quantity discounts aggregated over a stated time period are known as ________.
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Cumulative discounts
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_______ involves charging all customers the same price, regardless of geographic location
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Postage stamp pricing
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Which method of determining transfer pricing involves dividing all fixed and variable expenses for a period into the number of units produced?
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Actual full cost method
