Exam 16: Pricing and Credit Decisions

Which card is a retailer credit card?

If demand for a product is elastic,a change in price will have little effect on total revenues.

As the result of a 2012 court case,retailers may now add a surcharge to customers' bills for using a credit card.

WalMart grants credit to consumers who purchase for personal or family use.This type of credit is called:

Home-based businesses will find it easy to obtain merchant status with credit card companies.

Break-even analysis is an accurate tool for pricing because it points directly to the correct price for a given product.

Within the framework of a break-even analysis,an examination of ____ is conducted to determine the quantity at which the product,with an assumed price,will generate enough revenue to start earning a profit.

A trade credit bill of $80,000 with terms of sale of 2/10,net 30 means the buyer saves ____ if the bill is paid within the discount period.

One of the benefits of extending credit to borrowers is that doing so provides better records of purchases on credit billing statements.

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 -Privately owned organizations that summarize a number of firms' credit experiences with particular individuals

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 sets a range of several distinct merchandise price levels

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 -An approach based on setting a high price to convey an image of high quality or uniqueness

A primary purpose of the federal Consumer Credit Protection Act is to

Discuss accounts receivable management methods in a small business.

Credit cards are usually based on a(n)____ account system.

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 -Demand that changes significantly when there is a change in the price of a product or service

A business will not be successful unless it charges a price for its products that covers its total

The Consumer Credit Protection Act requires that the finance charge for credit be stated as an annual percentage rate and that creditors specify the procedures used for correcting billing mistakes.

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 -An agreement between a buyer and a seller that allows for delayed payment for a product or service

Pricing based on what the market will bear works only for non-standardized products in markets where there is low competition.