Question 1

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 2

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 3

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 4

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

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Question 5

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 6

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

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Question 7

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

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Quiz 14: Pricing Concepts for Establishing Value