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BUSML 3250 Final -Chapter 10 Pricing Exam Questions and Answers
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BUSML 3250 Final -Chapter 10 Pricing Exam Questions and Answers
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BUSML 3250 Final -Chapter 10 PricingExam Questions and Answers
Price - Answer--the amount of money charged for a product or service, or the sum of
the values that customers exchange for the benefits of having or using the product or
service
Customer value-based pricing - Answer--setting price based on buyers' perceptions of
value rather on the seller's cost --> price is considered along with all other marketing
variables before setting the program/don't set price after creating the product
Good-value pricing - Answer--offering just the right combination of quality and good
service at a fair price
-every day low pricing vs. high-low pricing
Value-added pricing - Answer--attaching the value-added features and services to
differentiate a company's offers and charging higher prices
Cost based pricing - Answer--setting prices based on the costs of producing,
distributing, and selling the product plus a fair rate of return for effort and risk --> can by
high or low
Fixed (overhead) costs - Answer--costs that do not vary with production or sales level
Variable costs - Answer--costs that vary directly with the level of production
Total costs - Answer--the sum of the fixed and variable costs for any given level of
production
Short/long run average cost curve - Answer--shows how costs decrease with increased
production until a specific point where diseconomies of scale occur
Experience (learning) curve - Answer--the drop in the average per-unit production cost
that comes with accumulated production experience
Cost-plus (markup) pricing - Answer--adding a standard markup to the cost of a product
Break-even (target return) pricing - Answer--setting a price to break even on the costs of
making and marketing a product, or setting price to make a target return --> uses break
even chart (intersection of total cost and total revenue)
Competition-based pricing - Answer--setting prices based on competitors' strategies,
prices, costs, and market offerings --> value is based off of a competitor's prices and
quality
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