Exam 12: Price Determination

Dreyer's is a manufacturer of over 100 flavors of ice cream-many of them indulgent, chunky flavors. Due to the increase of the costs of ingredients, Dreyer's has reduced the size of its ice cream cartons to 1¾ quarts so that it can still charge $5 for a carton of ice cream. Dreyer's perceived this $5 to be the _____ for a carton of ice cream.

The text identifies four distinct segments of shoppers based on the shoppers' perceptions of prices. Which of the following is NOT one of those segments?

No companies actually price to meet the competition today because that method lacks sophistication.

_____ _____ is the income derived from the sale of the last unit.

The Albany Clothing Company specializes in t-shirts clothes that are impervious to UV radiation. Its line of clothing sells well during the summer months, but it was hard to keep its workers employed in the winter months until it started a service to repair torn sleeping bags, tents, and other similar camping equipment. What pricing method should the company use to sell its service?

LoriAnn Oils sells bottled flavorings to cooks for spicing up their cakes, cookies, and candies. A case contains 48 bottles. Variable costs for making a case of peppermint oil equal $15. Fixed costs for each case are $2.75. The company wants to make a 150 percent profit on each case. Distribution costs to send a case to Alaska is $11. If more than three cases are ordered at one time, the price is reduced by 5 percent. What is the total cost for making three cases of peppermint oil?

When Patricia Flagg's friend asked her create something to sell at a holiday boutique food booth, she had no idea she was launching a new business. For her initial product she packaged eleven different kinds of beans, some herbs, and some spices with directions to add a ham hock, water, and vegetables for Minnesota Heartland soup. She has since added Illinois Prairie Corn chowder, which has dry corn, rice, and seasonings, as well as a Louisiana Red Bean gumbo mix and a New England fish soup mix. Each mix makes enough to feed 10 people. Her annual fixed costs are $9,000, and the variable costs for one bag of soup mix are $1.50. An individual bag of soup mix sells for $6.50. In her first year of operation, she sold 3,800 mixes. -Why did Flagg use cost-plus pricing to set her per-package price?

Which of the following statements about how middlemen use markups is true?

The total fixed costs for producing Lori's pearl-trimmed, shoulder-length tulle and lace wedding veils are $520 per month. Her total variable costs per veil are $60, and she sells the veils for $125. Her break-even point in units is _____ and in dollars is _____ for each month.

Which of the following is an example of a price?

Double-sized brass beds typically sell for about $1200. If a store that features antique reproductions were to try to sell a solid brass bed for $35, sales of the beds would probably be slow because of the perceived relationship between price and:

The sharp drop in revenue that occurs when an individual seller in an oligopoly raises its price above the prevailing level indicates sellers in an oligopoly face a(n):

The optimum volume of output is the quantity level at which:

The owner of a company that markets a line of mustard-based barbecue sauces was overheard talking to her husband, "Next year at this time when I look at this company's operating statement, I want to see that we have made more money than we ever thought possible." Assuming that the only way to achieve this goal is through pricing, this is an example of a _____ objective.

Cost-plus pricing is the most widely used of all pricing tools.

The fee paid to William Shatner for performing in Priceline.com ads (and not considering any residuals he might be paid) was most likely a ______ cost.

A(n) _____ is that quantity of output at which total revenue equals total costs, assuming a certain selling price.

When it comes to creating pricing strategy, marketers need to remember that one object of branding is to:

A kinked demand in an oligopoly occurs when:

Appstate sells bean mixes for soups. The company produces 2,000 packages per day. The total variable cost for making one bag of Mexicali bean soup is $3. The company charges $6.50 per bag and earns a 40 percent profit. Calculate the break-even point in units.