Exam 16: Pricing and Credit Decisions

Every applicant is credit worthy to some degree.

Match the term with its definition.Some terms may not be used. a.Consumer credit b.Credit bureaus c.Credit card d.Credit e.Installment account f.Open charge account g.Revolving charge account h.Trade credit i.Trade credit agencies j.Value -The extent to which a good or service is perceived by a customer as meeting his or her needs or wants,measured by the customer's willingness to pay for it

Tick Tock,a small retailer of a quality alarm clock,sells its product based on a 35% markup of cost.If the firm's product costs are approximately $133,what is the selling price?

Markup pricing may be expressed in terms of a percentage of either the ____ or the cost.

Commissions paid to a salesperson would be included in

Match the term with its definition.Some terms may not be used. a.Aging schedule b.Average pricing c.Bad-debt ratio d.Break-even analysis e.Break-even point f.Contribution margin g.Elastic demand h.Elasticity of demand i.Inelastic demand j.Value -The ratio of bad debts to credit sales

To ensure prompt payment,a business extending credit should have adequate billing records and collection procedures.

Match the term with its definition.Some terms may not be used. a.Aging schedule b.Average pricing c.Bad-debt ratio d.Break-even analysis e.Break-even point f.Contribution margin g.Elastic demand h.Elasticity of demand i.Inelastic demand j.Value -The examination of cost-revenue relationships and the incorporation of sales forecasts into the analysis

Sellers often decide to offer credit to borrowers because it helps with the exchange of purchased items.

Troy Bourbon,a local bourbon distillery,initially sold its product at a premium price of $45 because the company believed consumers would view the bourbon as a prestige item.The company decided that when startup costs had been fully recovered and competition became imminent,the company would reduce the price to $30 which was more expected in the market.The distillery is using a

A business that has a gaming console intended to compete directly with Sony's Playstation gaming console would likely use a ____ pricing strategy.

Tanya would like to gain market share rapidly so she has priced her product at a lower than normal,logn-range market price.Which strategy is Tanya using?

If the owner of Clarrisa's Fine Jewelry instructed the sales team to stress the uniqueness of the store's hand designed jewelry,a ____ pricing strategy would be expected.

A comprehensive break-even analysis entails

How are the two components of total cost related to variable and fixed costs? Use a clothing retailer to illustrate the costs.

Price lining refers to the systematic determination of the right price for a product or service.

Markups may be expressed as a percentage of either the firm's cost or the industry-standard cost.

Match the term with its definition.Some terms may not be used. a.Product line pricing b.Average pricing c.Follow-the-leader pricing d.Markup pricing e.Freemium strategy f.Prestige pricing g.Price lining strategy h.Price i.Skimming price strategy j.Value k.Variable pricing strategy -A strategy that offers customers basic features at no cost with the idea that they will upgrade to advanced products or services at subscription prices

A penetration price strategy is most practical when there is a low threat of short-term competition in the market or when startup costs must be recovered rapidly.

Match the term with its definition.Some terms may not be used. a.Product line pricing b.Average pricing c.Follow-the-leader pricing d.Markup pricing e.Freemium strategy f.Prestige pricing g.Price lining strategy h.Price i.Skimming price strategy j.Value k.Variable pricing strategy -A technique that prices on a range of products or services to reflect the benefits to the customer of parts of the range