Exam 37: Pricing Concepts

Smelly Fruit At first glance, there is little to like about the durian. The durian is a fruit popular in Thailand that is spiky outside and stinky on the inside. When confronted with the durian for the first time, the Wall Street Journal recently reported that westerners often describe its distinctive sulphurous smell with words like stinky socks and manure. However, the durian is so popular in Thailand that one variety of the durian fruit, called the Kan Yao, has been selling for as high as $200. Even at that price, supply of the Kan Yao cannot keep up with demand. There are approximately 30 varieties of the durian grown in Thailand, with the most plentiful selling in the $15 range. The yellow flesh of the durian, the part you eat, has very powerful smell but possesses a sweet, nutty taste that Thais cannot seem to get enough of at any price. -Refer to Smelly Fruit.Over the past two years,the price for Kan Yao durian fruit has increased by 50 percent.If the amount sold has remained almost constant,we would say that demand is:

At Walmart,Randi saw a bag of daffodil flower bulbs and a box of plant fertilizer.The items,which were sold together,retailed at $28.50 but were marked down to $19.99.The retailer sold one at the $28.50 price and five at the $19.99 price.The retailer's revenue is:

Name two advantages and two disadvantages associated with the use of break-even analysis.

American Girl Doll The American Girl catalog began as a concept to introduce today's girls to those who lived in the past. Each historically accurate doll is carefully crafted and dressed and has books to describe her life. For example, Kristen is an 1854 pioneer girl who is growing up in Minnesota. Her story begins with her long sea voyage from Sweden. The basic doll, dressed in a calico dress and striped apron plus the hardcover story of how she got to Minnesota, costs $90.00. Six more hardback books of Kristen's life are available for $74.95. Kristen's nightgown costs $20.00, and a matching one for the doll owner is an additional $38.00. Buy both together and the price is only $50.00. A hand-painted wooden bed and trunk for Kristen are available for $213.00. Shipping costs vary with the price of the merchandise ordered. -Refer to American Girl Doll.What is the revenue to American Girl if it sells 20 basic Kristen dolls?

When a seller determines the selling price by adding to cost an amount for profit and expenses not previously accounted for,the seller is using _____ pricing.

Smelly Fruit At first glance, there is little to like about the durian. The durian is a fruit popular in Thailand that is spiky outside and stinky on the inside. When confronted with the durian for the first time, the Wall Street Journal recently reported that westerners often describe its distinctive sulphurous smell with words like stinky socks and manure. However, the durian is so popular in Thailand that one variety of the durian fruit, called the Kan Yao, has been selling for as high as $200. Even at that price, supply of the Kan Yao cannot keep up with demand. There are approximately 30 varieties of the durian grown in Thailand, with the most plentiful selling in the $15 range. The yellow flesh of the durian, the part you eat, has very powerful smell but possesses a sweet, nutty taste that Thais cannot seem to get enough of at any price. -Refer to Smelly Fruit.Suppose that a Thai farmer sells ten Kan Yao durians in the marketplace at the going rate of $200 each.If it cost a Thai farmer $125 to produce and market the Kan Yao durian that she has sold,the difference between these two numbers ($75),times the number sold (ten),represents the farmer's:

Price is best described as:

The _____ is the quantity of a product that will be sold in the market at various prices for a specified period,and _____ is the quantity of a product that will be offered to the market by suppliers at various prices for a specified period.

_____ occurs when an increase in sales exactly offsets a decrease in price so that total revenue remains exactly the same.

An office supply store can buy a desk for $300.If the store owner sells the desk for $450,what is the markup based on the selling price?

Manufacturers can do all of the following to regain some control over the price their products are sold for at the retail level EXCEPT:

Which of the following statements about pricing strategies throughout the product life cycle is NOT true?

At Walmart,Randi saw a bag of daffodil flower bulbs and a box of plant fertilizer.The items,which were sold together,retailed at $28.50 but were marked down to $19.99.The $19.99 is the:

Research has shown that products perceived to be of high quality tend to benefit less from price promotions than products perceived to be of lower quality.

Tesla Motors "Going green" doesn't have to be boring. The Tesla Roadster Sport is an electric car that goes from 0 to 60 in four seconds and drives more like a race car than an environmentally friendly ride. But that level of performance will set you back $128,500. As of 2009, Silicon Valley-based Tesla Motors, Inc. was the only company offering highway-compatible electric cars. Most Roadster Sport buyers are car enthusiasts and are buying them for the "fun toy" aspect of having an electric car rather than for environmental reasons. -Refer to Tesla Motors.Say Tesla set the price of the Roadster high because the company wanted to promote a high-quality image.What type of pricing does this represent?

As a product moves through its life cycle,the demand for the product and the competitive conditions tend to change.For each stage in the product life cycle,discuss pricing strategies appropriate for that stage.

Research indicates that when a country's inflation rate is high,demand becomes more elastic.

For convenience,pricing objectives can be divided into three categories.They are:

_____ costs do not change as output is increased or decreased.

Which of the following is most likely to be a variable cost for an Internet retailer that sells spices,herbs,and seasonings to consumers?