UGA MARK 3000 GRANTHAM EXAM
3 PAPER COMPLETE QUESTIONS
WITH CORRECT ANSWERS
● Profit Oriented. Answer: A company objective that can be
implemented by focusing on target profit pricing, maximizing profits, or
target return pricing.
● Target Profit Pricing. Answer: A pricing strategy implemented by
firms when they have a particular profit goal as their overriding concern;
uses price to stimulate a certain level of sales at a certain profit per unit.
● Maximizing Profits. Answer: A profit strategy that relies primarily on
economic theory. If a firm can accurately specify a mathematical model
that captures all the factors required to explain and predict sales and
profits, it should be able to identify the price at which its profits are
maximized.
● Target Return Pricing. Answer: A pricing strategy implemented by
firms less concerned with the absolute level of profits and more
interested in the rate at which their profits are generated relative to their
investments; designed to produce a specific return on investment,
usually expressed as a percentage of sales.
,● Sales Orientation. Answer: A company objective based on the belief
that increasing sales will help the firm more than will increasing profits.
● Premium Pricing. Answer: A competitor-based pricing method by
which the firm deliberately prices a product above the prices set for
competing products to capture those consumers who always shop for the
best or for whom price does not matter.
● Competitor Orientation. Answer: A company objective based on the
premise that the firm should measure itself primarily against its
competition.
● Competitive Parity. Answer: A firm's strategy of setting prices that are
similar to those of major competitors.
● Status Quo Pricing. Answer: A competitor-oriented strategy in which a
firm changes prices only to meet those of competition.
● Customer Orientation. Answer: A company objective based on the
premise that the firm should measure itself primarily according to
whether it meets its customer's needs.
● Demand Curve. Answer: Shows how many units of a product or
service consumers will demand during a specific period at different
prices.
, ● Prestige Products or Services. Answer: Those that consumers purchase
for status rather than functionality.
● Price Elasticity of Demand. Answer: Measures how changes in a price
affect the quantity of the product demanded; Specifically, the ratio of the
percentage change in quantity demanded to the percentage change in
price.
● Price Elasticity of Demand Function. Answer: Elasticity= (% Change
in Quantity Demanded)/ (% Change in Price)
● Elastic. Answer: Refers to a market for a product or service that is
price sensitive; that is, relatively small changes in price will generate
fairly large changes in the quantity demanded.
● Inelastic. Answer: Refers to a market for a product or service that is
price insensitive; That is, relatively small changes in price will not
generate large changes in the quantity demanded.
● Income Effect. Answer: Refers to the change in the quantity of a
product demanded by consumers due to a change in their income.
3 PAPER COMPLETE QUESTIONS
WITH CORRECT ANSWERS
● Profit Oriented. Answer: A company objective that can be
implemented by focusing on target profit pricing, maximizing profits, or
target return pricing.
● Target Profit Pricing. Answer: A pricing strategy implemented by
firms when they have a particular profit goal as their overriding concern;
uses price to stimulate a certain level of sales at a certain profit per unit.
● Maximizing Profits. Answer: A profit strategy that relies primarily on
economic theory. If a firm can accurately specify a mathematical model
that captures all the factors required to explain and predict sales and
profits, it should be able to identify the price at which its profits are
maximized.
● Target Return Pricing. Answer: A pricing strategy implemented by
firms less concerned with the absolute level of profits and more
interested in the rate at which their profits are generated relative to their
investments; designed to produce a specific return on investment,
usually expressed as a percentage of sales.
,● Sales Orientation. Answer: A company objective based on the belief
that increasing sales will help the firm more than will increasing profits.
● Premium Pricing. Answer: A competitor-based pricing method by
which the firm deliberately prices a product above the prices set for
competing products to capture those consumers who always shop for the
best or for whom price does not matter.
● Competitor Orientation. Answer: A company objective based on the
premise that the firm should measure itself primarily against its
competition.
● Competitive Parity. Answer: A firm's strategy of setting prices that are
similar to those of major competitors.
● Status Quo Pricing. Answer: A competitor-oriented strategy in which a
firm changes prices only to meet those of competition.
● Customer Orientation. Answer: A company objective based on the
premise that the firm should measure itself primarily according to
whether it meets its customer's needs.
● Demand Curve. Answer: Shows how many units of a product or
service consumers will demand during a specific period at different
prices.
, ● Prestige Products or Services. Answer: Those that consumers purchase
for status rather than functionality.
● Price Elasticity of Demand. Answer: Measures how changes in a price
affect the quantity of the product demanded; Specifically, the ratio of the
percentage change in quantity demanded to the percentage change in
price.
● Price Elasticity of Demand Function. Answer: Elasticity= (% Change
in Quantity Demanded)/ (% Change in Price)
● Elastic. Answer: Refers to a market for a product or service that is
price sensitive; that is, relatively small changes in price will generate
fairly large changes in the quantity demanded.
● Inelastic. Answer: Refers to a market for a product or service that is
price insensitive; That is, relatively small changes in price will not
generate large changes in the quantity demanded.
● Income Effect. Answer: Refers to the change in the quantity of a
product demanded by consumers due to a change in their income.
