Companies use a price premium to assess whether their products and brands are priced above, at, or below the market. This price premium equals
A) unit volume market share for a brand, divided by dollar sales market share for a brand, minus one.
B) dollar sales market share for a brand, divided by unit volume market share for a brand, plus one.
C) dollar sales market share for a brand, divided by unit volume market share for a brand, minus one.
D) unit volume market share for a brand, divided by dollar sales market share for a brand, plus one
E) dollar sales market share for a brand, divided by unit volume market share for a brand, minus the number of competitors against which a brand is being measured.

Question

Quizplus · Accepted Answer

Price premium is calculated by dividing the dollar sales market share by the unit volume market share and then subtracting one. This shows how much more or less a brand is priced compared to the average market price.

Companies Use a Price Premium to Assess Whether Their Products