Exam 16: Pricing and Credit Decisions

After defining three pricing strategies,state when a small business would best use the strategy.

Retro Hits,a local band covering songs from the 1980s and 1990s,decided they wanted to expand to more college students.Research showed students thought the current $25 ticket price was too high for a local band.To strengthen ticket demand,Retro Hits began offering $15 tickets to all fans who checked in on Facebook.The band was using a

The total sales revenue of a small business is a direct reflection of

Explain the relationship between the break-even point and the contribution margin.How does demand affect this relationship?

Collateral is generally required for open charge accounts.

For a price lining strategy,a company's inventory levels for each line will depend directly on the ____ of the customers.

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 difference between the unit selling price and the unit variable costs and expenses

Under certain conditions,pricing at less than total costs can make sense as a short-term strategy.

The primary purposes of the Equal Credit Opportunity Act are to inform consumers about terms of a credit agreement and to require creditors to specify how finance charges are computed.

An important source of credit information is the customer's previous credit history.

Cost analysis can identify a level below which a price should not be set under normal circumstances.

Markup rates should be high enough to cover a product's cost,other expenses,any price reductions,and profit.

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 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

Layla is a well-known successful movie star who recently retired and just started designing handbags.She has opened a boutique business in her home town,which has no national department stores.She hopes to attract other celebrities,tourists,and local residents to shop at her store.She is considering pricing strategies for her products.Which strategy would best fit her image and product?

Demand for a product typically ______ as price ______.

Beverly is systematically comparing various cost and revenue estimates in order to determine the acceptability of alternative prices.Beverly is using:

An installment account is a typical trade credit agreement.

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 -Financing provided by suppliers to client companies

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 collect credit information on businesses

A small business in competition with larger firms is seldom in a position to function as a price leader.