Exam 11: Pricing and Credit Strategies

In ________ pricing,a type of geographical pricing,a small firm charges customers located in different territories different prices for the same products.

The final price set by the entrepreneur for the products depends on:

Qualifying for merchant status is relatively easy for most small businesses.

________ tells what portion of the total revenues remains after covering variable costs to contribute toward meeting fixed expenses and earning a profit.

Penetration refers to if a business introduces a product into a highly competitive market in which a large number of similar products are competing for acceptance.

When a small business owner doesn't want to make a pricing decision,he/she can use a(n)________ pricing strategy.

A common "me-too" pricing policy by which the small business owner establishes his/her prices by monitoring competitor's prices and then matching them is called:

As sales volume increases with the broad acceptance of the new products,the firm can lower its price.This is a characteristic of:

The price floor of a product or service is set by the company's cost structure.

If a firm lacks a unique business image,it must match its competitor's prices or risk losing customers.

Probably the most important consideration a manufacturer has when setting the final price of its new exclusive perfume is:

Businesses faced with rapidly rising raw materials costs should consider the following strategies:

The basic objective of a penetration pricing policy is to:

The underlying forces that dictate price are generally the same across industries,so that all businesses in that industry have the same underlying cost factors.

The most commonly used pricing technique for manufacturers is:

Price wars can eradicate companies' profit margins and scar an entire industry for years.

Fixed expenses fluctuate according to production levels.

All firms within an industry have the same price floor.

The problem with using full absorption cost information when setting prices is that it clouds the true relationships among price,volume,and costs by including fixed expenses in unit cost.

Two factors are vital to studying the effects of competition on a small firm's pricing policies: the location of the competitors and the nature of the competing goods.