Question 1

What does an everyday low prices strategy say to consumers?

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Question 2

Why is it more fun and challenging for a marketer to be part of a market characterized by monopolistic competition than be part of one characterized by pure competition?

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Question 3

Raymond estimates the fixed costs associated with opening a new bank branch are $500,000.He estimates the branch will attract 1,000 new customers who will cost $50 / year to service each of their accounts.He also expects to generate $100,000 in fees annually from these accounts.What will be the total cost of opening the new branch and remaining open for one year?

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Question 4

Karen initially charged $80 for an hour-long massage and averaged 20 clients per week.When she raised her price to $100,the number of massages decreased to 15 per week.What is the price elasticity of demand for her service?

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Question 5

What is cross-shopping and what does it mean for marketers' pricing strategy?

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Question 6

Small business consultants are constantly admonishing would-be entrepreneurs,"Beware of the overhead." Use break-even analysis first with an overhead of $100,000 and second with an overhead of $200,000,and a contribution per unit of $50 to demonstrate this admonition.

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Question 7

Fenton has always used standard markups to determine the prices for his clothing products.You are advising him to change his pricing strategy.What advice would you give Fenton?

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Question 8

Chet knows that the pro shops selling his tennis racquets will "keystone" his product.He also knows sales will decline significantly if the retail price is greater than $100.What is the maximum wholesale price Chet can charge?

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Question 9

How have price comparison websites like Pricegrabber.com affected marketers' pricing strategies?

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Question 10

Brandon is conducting an experiment,charging different prices for the same products at different stores and measuring sales.With this information,he will construct a demand curve.How can Brandon use this information?

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Question 11

How can brand loyalty affect the price elasticity of demand for a firm's products?

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Question 12

If consumers are more sensitive to price increases than price decreases,what does that say about price elasticity of demand?

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Question 13

What does "price is the overall sacrifice a consumer makes to acquire a product" mean?

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Question 14

Why are price wars more common in oligopolies than in pure competition markets?

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Question 15

Gerhard explains the concept of break-even analysis to his father who owns a daycare center.Gerhard's father grimaces,saying,that break-even analysis is too simplistic and won't work for him.What specific limitations associated with break-even analysis will Gerhard's father probably point out?

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Question 16

What is the experience curve effect? What pricing strategy is it associated with?

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Quiz 13: Pricing Concepts for Establishing Value