Pricing Unit Review

One reason why the target market of a business affects its pricing is because consumers in each target market

• monitor the industry standard.

• expect a large product mix.  

• prefer products in the growth stage.

• judge the value of products differently.  

Why do some new companies set their selling prices as low as they can?

• To get market share as fast as possible

• To eliminate all possible competition

• To earn a high return on investment 

• To quickly make a large profit 

Expenses that stay the same no matter how many units sold are called __.

• variable costs

• fixed costs

• break even costs

• average selling price

The formula for Breakeven Point (BP) = Fixed Costs / (Selling Price - Variable Costs)

• True

• False

Pricing is simply the exchange rate you put on all the tangible and intangible aspects of your business. Perceived value for cash.

• True

• False

Buying a value meal at a restaurant that includes a sandwich, fries, and a drink for one price is an example of which pricing strategy?

• Economy Pricing

• Value-Based Pricing

• Bundle Pricing

• Dynamic Pricing

An online news website offering one month free for a subscription-based service or a bank offering a free checking account for six months is an example of which pricing strategy?

• Price Skimming

• Market Penetration Pricing

• Value-Based Pricing

• Economy Pricing

An airline will shift seat prices based on seat type, number of remaining seats, and time until the flight is which type of pricing strategy?

• Economy Pricing

• Dynamic Pricing

• Price Skimming

• Premium Pricing

A product is originally priced at $55 is marked 25% off. What is the sale price? _

Blue Corp. shows monthly fixed costs of $1,797 and per-unit cost of $9.28. It sells 411 units in a month. What is the minimum price Blue Corp. must sell each unit for to break even?