Question 1

buying situation can involve comparing the costs and benefits of substitute items-such as real sugar to the sugar substitute Splenda,which,although more expensive than sugar,is purchased by many consumers because it contains no calories.This situation involves the consumer considering

Accepted Answer

The answer of buying situation can involve comparing the costs...

Question 2

Figure 13-2
-Figure 13-2 above represents the six steps in the price-setting process."A" represents the step at which a firm would

Accepted Answer

Figure 13-2 represents the six steps in the price-setting process and "B" represents the step of identifying pricing objectives and constraints. This step is typically the first in the price-setting process as it helps a firm to determine how to price their product or service to achieve specific business goals while taking into account any internal or external factors that may limit or affect pricing decisions.

Question 3

__________ equation = (Unit price × Quantity sold)− Total cost.

Accepted Answer

The given equation is used to calculate the profit.

Question 4

Calculate a firm's total revenue (TR)using the following information: the unit price (P)for a product is $40; the quantity sold (Q)is 2,000; the fixed cost (FC)is $50,000; and the variable cost (VC)is $20,000.

Accepted Answer

The answer of Calculate a firm's total revenue (TR)using the...

Question 5

Figure 13-2
-Figure 13-2 above represents the six steps in setting price."B" represents the step at which a firm would

Accepted Answer

The answer of  Figure 13-2
-Figure 13-2 above represents the...

Question 6

reference value involves comparing the costs and benefits of __________.

Accepted Answer

Reference value involves comparing the costs and benefits of substitute items.

Question 7

firm's profit equation equals

Accepted Answer

The firm's profit equation is calculated as Total revenue minus Total cost. This can also be expressed as [(Unit price × Quantity sold) − (Fixed cost + Variable cost)], which is the same as option B. Option A and E both add Total cost to Total revenue, which would result in a higher amount than the actual profit. Option C uses Marginal cost, which is not part of the profit equation. Option D subtracts Variable cost from Total cost, which is not a correct way to calculate profit.

Question 8

Figure 13-2
-Figure 13-2 above represents the six steps in setting price.Which letter represents the step where a firm would estimate price elasticity?

Accepted Answer

Step "B" represents estimating price elasticity, as this is a necessary component in determining the optimal price for a product.

Question 9

BOGO offer is retail slang that means

Accepted Answer

BOGO stands for "buy one, get one" and refers to a promotional offer where a customer can get a second item for free or at a discounted price when they purchase one item at regular price.

Question 10

Figure 13-2
-Figure 13-2 above represents the six steps in setting price."C" represents the step at which a firm would

Accepted Answer

The answer of  Figure 13-2
-Figure 13-2 above represents the...

Question 11

American Eagle Outfitters In-Store Signage Photo
-American Eagle Outfitters in-store signage photo above shows that customers can buy an American Eagle Outfitters hoodie for $24.95 and then purchase another one for 50 percent off (BOGO Deal "A").Another BOGO deal (not shown above)offers consumers a markdown of 10 percent if they buy two hoodies (BOGO Deal "B").In a third BOGO deal (not shown above),a retailer has marked down the price of hoodies from $24.95 to $22.95 per hoodie,so you'll consider buying two at that price (BOGO Deal "C").BOGO deal #4 (not shown above)offers consumers the following terms: 5 percent off the first item and then 10 percent off the reduced price for the second item (BOGO Deal "D").Finally,a fifth BOGO deal offers consumers the following terms: $10 off of all purchases of $40 or more (BOGO Deal "E").Which BOGO deal offers the best value (least cost)to consumers for the purchase of American Eagle Outfitters hoodies?

Accepted Answer

BOGO Deal "A" offers the best value because the first hoodie is $24.95, and the second is 50% off, making it $12.475. The total cost for two hoodies is $37.425, which is less than the other deals.

Question 12

reference value __________.

Accepted Answer

Reference value involves comparing the costs and benefits of substitute items, as it is the perceived value of a product in comparison to alternatives.

Question 13

you wanted to buy a McDonald's Big Mac,small fries,and a small drink separately,it you cost you $6.19.However,if you purchased these three items together as part of the firm's Extra Value Meal package,you would pay only $4.39,savings 80¢.This "Extra Value Meal" price serves as __________ to you and other consumers,who compare the costs and benefits of substitute items to a bundle containing those items.

Accepted Answer

The "Extra Value Meal" price serves as a reference value for consumers who may compare the costs and benefits of buying the items separately or as part of the bundle. It is a standard price against which other prices are compared, making it a reference value. Marginal analysis, profit equation, and break-even analysis are methods used in analyzing costs and revenue for a particular product or service. Price elasticity of demand, on the other hand, measures the responsiveness of demand to changes in price.

Question 14

Gap In-Store Signage Photo
-Gap in-store signage photo above shows that customers can save 60 percent off a second item if they purchase one at the full price.This is an example of a __________ deal to entice shoppers to buy additional items.

Accepted Answer

The signage is promoting a BOGO (Buy One, Get One) deal, where customers can save 60% off a second item if they purchase one at full price.

Question 15

Figure 13-2
-Figure 13-2 above represents the six steps in setting price."D" represents the step at which a firm would

Accepted Answer

The answer of  Figure 13-2
-Figure 13-2 above represents the...

Question 16

Figure 13-2
-Figure 13-2 above represents the six steps in setting price."E" represents the step at which a firm would

Accepted Answer

The answer of  Figure 13-2
-Figure 13-2 above represents the...

Question 17

Figure 13-2
-Figure 13-2 above represents the six steps in setting price."F" represents the step at which a firm would

Accepted Answer

The answer of  Figure 13-2
-Figure 13-2 above represents the...

Question 18

formula,Total revenue − Total cost,or [(Unit price × Quantity sold)− (Fixed cost + Variable cost)] represents __________.

Accepted Answer

The formula Total revenue − Total cost,or [(Unit price × Quantity sold)− (Fixed cost + Variable cost)] represents the profit equation, as it calculates the difference between the revenue earned and the overall cost of production.

Question 19

firm's profit equation demonstrates that profit equals __________.

Accepted Answer

The profit equation is generally expressed as total revenue minus total cost. This formula takes into account all the revenue earned by the firm and subtracts all the costs involved in producing and selling the goods or services. This leaves the profit as the amount that remains after all costs have been subtracted from revenue.

Question 20

McDonald's Menu Board Photo
-shown in the McDonald's menu board photo above,McDonald's is most likely using which type of pricing strategy?

Accepted Answer

Based on the McDonald's menu board photo, it seems that McDonald's is using a value-pricing strategy. The prices are relatively low compared to the offerings, indicating that they are offering a good value to their customers. Additionally, there are a variety of options at different price points, including bundles and deals, further suggesting a value-pricing approach.

Quiz 13: Building the Price Foundation

buying situation can involve comparing the costs and benefits of substitute items-such as real sugar to the sugar substitute Splenda,which,although more expensive than sugar,is purchased by many consumers because it contains no calories.This situation involves the consumer considering

Figure 13-2 -Figure 13-2 above represents the six steps in the price-setting process."A" represents the step at which a firm would

__________ equation = (Unit price × Quantity sold) − Total cost.

Calculate a firm's total revenue (TR) using the following information: the unit price (P) for a product is $40; the quantity sold (Q) is 2,000; the fixed cost (FC) is $50,000; and the variable cost (VC) is $20,000.

Figure 13-2 -Figure 13-2 above represents the six steps in setting price."B" represents the step at which a firm would

reference value involves comparing the costs and benefits of __________.

firm's profit equation equals

Figure 13-2 -Figure 13-2 above represents the six steps in setting price.Which letter represents the step where a firm would estimate price elasticity?

BOGO offer is retail slang that means

Figure 13-2 -Figure 13-2 above represents the six steps in setting price."C" represents the step at which a firm would

reference value __________.

Gap In-Store Signage Photo -Gap in-store signage photo above shows that customers can save 60 percent off a second item if they purchase one at the full price.This is an example of a __________ deal to entice shoppers to buy additional items.

Figure 13-2 -Figure 13-2 above represents the six steps in setting price."D" represents the step at which a firm would

Figure 13-2 -Figure 13-2 above represents the six steps in setting price."E" represents the step at which a firm would

Figure 13-2 -Figure 13-2 above represents the six steps in setting price."F" represents the step at which a firm would

formula,Total revenue − Total cost,or [(Unit price × Quantity sold) − (Fixed cost + Variable cost) ] represents __________.

firm's profit equation demonstrates that profit equals __________.

McDonald's Menu Board Photo -shown in the McDonald's menu board photo above,McDonald's is most likely using which type of pricing strategy?