MGT 103 Final Bates Exam Questions
with Complete Answers
price - Answer-money or other considerations exchanged for the ownership or use of a
product or service
barter - Answer-practice of exchanging products and service for other products or
services rather than for money
price equation - Answer-list price -incentives and allowances + extra fees
value - Answer-ratio of perceived benefits to price
perceived benefits/price
value pricing - Answer-practice of simultaneously increasing product and service
benefits while maintaining or decreasing price
profit equation - Answer-=total revenue -total cost
=(unit price x quantity sold) - (fized cost +variable cost)
process of setting prices - Answer-1. identify pricing objectives and constraints
2. estimate demand and revenue
3. determine cost, volume, and profit relationships
4. select an approximate price level
5. set list or quoted price
6. make special adjustments to list or quoted price
pricing objectives - Answer-specifying the role of price in an organizations marketing
and strategic plans
-lower levels of org
3 objectives of firms profit - Answer--ROI OR ROA
-managing for long-run profits
-maximizing current profits
-target return
market share - Answer-ratio of the firms sales revenues or unit sales to those in the
industry
unit volume - Answer--the quantity produced or sold
pricing constraints - Answer--factors that limit the range of prices a firm may set
,pure competition - Answer-hundreds of people compete and their price is set by
marketplace
monopolistic competition - Answer-dozens of regional, private brands , price and non
price
oligopoly - Answer--try to avoid price competition to try and avoid losing money
pure monopoly - Answer-own person in industry
consumer-driven pricing actions - Answer-consumers compare prices
seller/retailer driven pricing action - Answer--aggresive price changes ;
demand curve - Answer-graph that relates the quantity sold and price, showing the
maximum number of units that will be sold at a given price
consumer tastes - Answer-depends on demographics, culture, and technology
-can change quickly
price and availability of similar products - Answer-price falls, more people buys
-price of substitute falls or availability increases, demand for normal food falls
consumer income - Answer-consumers income increase, demand for a product will also
increase
demand factors - Answer-factors that determine consumers willingness and ability to
pay for products and services
price elasticity of demand - Answer-= percentage change in quantity demanded/
percentage change in price
elastic demand - Answer-1% decrease in price produces more than 1% increase in
quantity demanded, thereby increasing total revenue
inelastic demand - Answer-1% decrease in price produces less than a 1% increase in
quantity demanded, thereby decreasing total revenue.
total revenue - Answer-total money recieved from the sale of a product
=P (price) x Q (quantity sold)
4 cost concepts - Answer-total cost, fixed cost, variable cost, and unit variable cost
break-even analysis - Answer-analyzes the relationship between total revenue and total
cost to determine profitability at various levels of output
, break even point (BEP) - Answer-quantity at which total revenue and total cost are
equal
= Fixed cost/ unit price -unit variable cost
break even chart - Answer-depicts graphic presentation of the break-even analysis
demand-oriented approach - Answer-weigh factors underlying expected customer
tastes and preferences more heavily than such factors such as cost, profit, and
competition when selecting a price level
skimming pricing - Answer-setting the highest initial price that customers who really
desire the product are willing to pay
penetration pricing - Answer-exact opp of skimming; setting a low initial price on a new
product to appeal immediately to the mass market
prestige pricing - Answer-setting a high price so that quality consumers will be attracted
to the product and buy it
price lining - Answer-selling a line of products and pricing them at a number of different
specific pricing points
odd-even pricing - Answer-setting prices a few dollars or cents under an even number
2.99
target pricing - Answer-manufacturer adjusting the composition and features of a
product to achieve the target price to consumers
estimate the price that a consumer will be willing to pay
bundle pricing - Answer-the marketing of two or more products in a single package price
yield management pricing - Answer-charging of different prices to maximize revenue for
a set amount of capacity at any given time
standard markup pricing - Answer-adding a fixed percentage to the cost of all items in a
specific product class
cost-plus pricing - Answer-summing the total unit cost of providing a product or service
and adding a specific amount to the cost to arrive at a price
cost-plus percentage of cost pricing - Answer-fixed percentage is added to the total unit
cost
cost-plus fixed fee pricing - Answer-supplier is reimbursed for all costs, regardless of
what they turn out to be, but only allowed a fixed fee as profit that is independent of the
final cost of the project
with Complete Answers
price - Answer-money or other considerations exchanged for the ownership or use of a
product or service
barter - Answer-practice of exchanging products and service for other products or
services rather than for money
price equation - Answer-list price -incentives and allowances + extra fees
value - Answer-ratio of perceived benefits to price
perceived benefits/price
value pricing - Answer-practice of simultaneously increasing product and service
benefits while maintaining or decreasing price
profit equation - Answer-=total revenue -total cost
=(unit price x quantity sold) - (fized cost +variable cost)
process of setting prices - Answer-1. identify pricing objectives and constraints
2. estimate demand and revenue
3. determine cost, volume, and profit relationships
4. select an approximate price level
5. set list or quoted price
6. make special adjustments to list or quoted price
pricing objectives - Answer-specifying the role of price in an organizations marketing
and strategic plans
-lower levels of org
3 objectives of firms profit - Answer--ROI OR ROA
-managing for long-run profits
-maximizing current profits
-target return
market share - Answer-ratio of the firms sales revenues or unit sales to those in the
industry
unit volume - Answer--the quantity produced or sold
pricing constraints - Answer--factors that limit the range of prices a firm may set
,pure competition - Answer-hundreds of people compete and their price is set by
marketplace
monopolistic competition - Answer-dozens of regional, private brands , price and non
price
oligopoly - Answer--try to avoid price competition to try and avoid losing money
pure monopoly - Answer-own person in industry
consumer-driven pricing actions - Answer-consumers compare prices
seller/retailer driven pricing action - Answer--aggresive price changes ;
demand curve - Answer-graph that relates the quantity sold and price, showing the
maximum number of units that will be sold at a given price
consumer tastes - Answer-depends on demographics, culture, and technology
-can change quickly
price and availability of similar products - Answer-price falls, more people buys
-price of substitute falls or availability increases, demand for normal food falls
consumer income - Answer-consumers income increase, demand for a product will also
increase
demand factors - Answer-factors that determine consumers willingness and ability to
pay for products and services
price elasticity of demand - Answer-= percentage change in quantity demanded/
percentage change in price
elastic demand - Answer-1% decrease in price produces more than 1% increase in
quantity demanded, thereby increasing total revenue
inelastic demand - Answer-1% decrease in price produces less than a 1% increase in
quantity demanded, thereby decreasing total revenue.
total revenue - Answer-total money recieved from the sale of a product
=P (price) x Q (quantity sold)
4 cost concepts - Answer-total cost, fixed cost, variable cost, and unit variable cost
break-even analysis - Answer-analyzes the relationship between total revenue and total
cost to determine profitability at various levels of output
, break even point (BEP) - Answer-quantity at which total revenue and total cost are
equal
= Fixed cost/ unit price -unit variable cost
break even chart - Answer-depicts graphic presentation of the break-even analysis
demand-oriented approach - Answer-weigh factors underlying expected customer
tastes and preferences more heavily than such factors such as cost, profit, and
competition when selecting a price level
skimming pricing - Answer-setting the highest initial price that customers who really
desire the product are willing to pay
penetration pricing - Answer-exact opp of skimming; setting a low initial price on a new
product to appeal immediately to the mass market
prestige pricing - Answer-setting a high price so that quality consumers will be attracted
to the product and buy it
price lining - Answer-selling a line of products and pricing them at a number of different
specific pricing points
odd-even pricing - Answer-setting prices a few dollars or cents under an even number
2.99
target pricing - Answer-manufacturer adjusting the composition and features of a
product to achieve the target price to consumers
estimate the price that a consumer will be willing to pay
bundle pricing - Answer-the marketing of two or more products in a single package price
yield management pricing - Answer-charging of different prices to maximize revenue for
a set amount of capacity at any given time
standard markup pricing - Answer-adding a fixed percentage to the cost of all items in a
specific product class
cost-plus pricing - Answer-summing the total unit cost of providing a product or service
and adding a specific amount to the cost to arrive at a price
cost-plus percentage of cost pricing - Answer-fixed percentage is added to the total unit
cost
cost-plus fixed fee pricing - Answer-supplier is reimbursed for all costs, regardless of
what they turn out to be, but only allowed a fixed fee as profit that is independent of the
final cost of the project
