Exam 13: Pricing Products and Services

Many cruise lines pay the customers airfare to the point of cruise departure.What type of price adjustment are the cruise lines using?

An ad campaign by Suave shampoo asked television viewers to identify the hair that was shampooed and conditioned with Suave products and the hair on which expensive salon hair-care products were used.The idea of the ad was that a person could not tell by looking that a woman was using the much cheaper Suave brand.By making price its selling point,Suave is most likely using:

Manufacturers use seasonal discounts to:

A company that manages apartments decides to buy 17 new dishwashers at a list price of $750 each as replacements for old dishwashers in a small apartment complex it owns.Because the company is buying more than 10 dishwashers,it is eligible for a $150 per unit quantity discount.Financing charges total $20 per unit.The company gets $10 per dishwasher for the 17 dishwashers traded in.What is the actual price the company will pay for each dishwasher?

To promote their business,some psychics advertise free tarot card readings and other insights into their customers' futures on television.Unfortunately,this "free reading" has cost some unsuspecting callers as much as $700 in phone charges.This sort of deceptive pricing practice would be monitored by the:

Ace Shoe Company sells heel replacement kits for men's shoes.It has fixed costs of $6 million and unit variable costs of $5 per pair.Suppose a consultant tells Ace it can sell 700,000 heel repair kits,what price must it charge to achieve a profit of $2.5 million?

Bob Biltmore owns dozens of very successful print shops throughout the Prairie Provinces.Biltmore's shops specialize in low-cost black and white copies and feature user-friendly machines consumers can easily operate.In recent months,Biltmore has noticed many more competitors in the areas where his stores are located.In an attempt to eliminate the competition,Biltmore has decided to charge a very low price for his black and white copies,a price so low his competitors will be forced out of business.After the competition has been driven out,Biltmore plans to raise the price of his copies.Biltmore is planning to engage in the illegal practice of:

The owner of a small restaurant that sells take-out fried chicken and biscuits pays $2,500 in rent each month,$500 in utilities,$750 interest on his loan,insurance premium of $200,and advertising on local bus $250 a month.A small bucket of take-out chicken,the only menu item,is priced at $9.50.Unit variable costs for the bucket of chicken are $5.50.At what level of sales of dollars of revenue will the restaurant break even?

When purchasing which one of the following products would you be likely to receive a seasonal discount?

Figure: 13-5a -Figure 13-5a shows that when the quantity demanded moves from 3.0 to 4.5 million units,the profit

Figure: 13-3 -In Figure 13-3,column "A" represents which type of competitive market?

Different brands within a company's product line generally have different profit margins; higher price lines have higher profit margins.For example,Nike Variety tennis shoes have variable costs of $6 and sell for $24; whereas,Nike Wimbledon tennis shoes have variable costs of $10 and sell for $48.It must be true that:

GE made $50 billion in revenue in 2013 with total expenses of $35 billion,what was their total profit?

Figure: 13-3 -In Figure 13-3,column "C" represents which type of competitive market?

Variable cost is the:

Hallmark was the official supplier of flowers at the last Winter Olympics.It was the first time that it has participated in the Olympics.Hallmark presented each Olympic winner with a special bouquet of roses designed to resemble the Olympic torch.Consumers can buy a smaller version of this same bouquet at the Hallmark website for $74.95.The Olympic bouquet that consumers can buy contains two dozen yellow roses,yet you can buy two dozen yellow roses for less than $35 at most supermarkets.If Hallmark is treating the Olympic bouquet as an innovative product,then it is using which demand-oriented approach to pricing?

The cash payment or extra amount of "free goods" awarded to sellers in the channel of distribution for undertaking certain advertising or selling activities to promote the product is a:

At a local coffee shop,where you frequent,you are enrolled in their frequent-buyer program,where,for every ten coffees you purchase,you get one for free.Essentially,the coffee shop is engaged in offering a(n):

Jane Westerlund owns a picture-framing shop,The Caplow Co.The average price she receives for a picture she frames for a customer is $120.This price must cover her average costs for a typical framed picture of $5 for glass,$2 for matting,and $13 for the frame,and $30 for the labour involved.She must also cover monthly expenses of $1,000 for rent and insurance,$200 for heat and electricity,$500 for advertising,and $3,500 for her salary.Assuming everything else stays the same,if Jane Westerlund increased the average price charged for a framed picture,in a break-even chart this would cause the slope of the total revenue curve to _____ and the break-even quantity to ______.

TB Figure: 1 -TB Figure 1 represents the six distinct steps in the pricing process.In which cell would you be reviewing the following approaches: demand-oriented,cost-oriented,profit-oriented,and competition-oriented?