MGT 103 STUDY FINAL EXAM QUESTIONS WITH LATEST UPDATE
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Course
MGT103
Institution
MGT103
6 Steps in setting price - Answer-(1) identify pricing objectives and constraints, (2) estimate demand and revenue, (3) determine cost, volume, and profit relationships, (4) select an approimate price level, (5) set list or quoted price, (6) make special adjustments to list or quoted price
Funda...
MGT 103 STUDY FINAL EXAM
QUESTIONS WITH LATEST UPDATE
6 Steps in setting price - Answer-(1) identify pricing objectives and constraints, (2)
estimate demand and revenue, (3) determine cost, volume, and profit relationships, (4)
select an approimate price level, (5) set list or quoted price, (6) make special
adjustments to list or quoted price
Fundamental revenue concepts - Answer-Demand Curves and Revenue = (Change in
Quantity Demanded) / (Change in Price)
Break even point - Answer-the number of sales a business must achieve to generate a
zero operating profit, calculated as fixed costs divided by the contribution margin
Break Even Analysis - Answer-total fixed costs / (price of one unit-variable costs of one
unit)
Revenue - Answer-Revenue is the money you collect
for things you sell. Revenue is equal
to Unit Sales x Price of each unit.
A sports franchise has a number of
revenue sources, including: ticket sales,
concessions, licensing and sponsorships.
Total Revenue - Answer-Price x Quantity
Average Revenue - Answer-Total revenue received divided by the number of units sold.
Usually, price is equal to average revenue.
Marginal Revenue - Answer-The change in total revenue that results from the sale of 1
additional unit of a firm's product; equal to the change in total revenue divided by the
change in the quantity of product sold
Movement Demand Curve - Answer-When the price of a good increases (decreases),
the quantity demanded of a good decreases (increases), other factors constant (ceteris
paribus) and this results in a...
Shift Demand Curve - Answer-The change that takes place in a demand curve
corresponding to a new relationship between quantity demanded of a good and price of
that good. The shift is brought about by a change in the original conditions.
Price elasticity - Answer-Is the demand of an economic measure to how much the
quantity of a good demanded changes when the price changes. Equation: percentage
, change in quantity sold divided by the percentage change in price (% change in
quantity(demand) sold/% change in price)
Skimming pricing - Answer-setting the highest initial price that customers really desiring
the product are willing to pay.(new or innovative)
Penetration pricing - Answer-setting a low initial price on a new product to appeal
immediately to the mass market
Prestige pricing - Answer-involves setting a high price so that quality- or status-
conscious consumers will be attracted to the product and buy it.
Loss-leader pricing - Answer-deliberately selling a product below its customary price not
to increase sales but to attract customers attention in hopes that they will buy other
products as well
Price Lining - Answer-setting a limited number of prices for a line of products;
establishing price points between products in a product line; used to communicate
differences in quality and/or service to consumers.
Franchise - Answer-contract allowing operation under an established name in exchange
for royalties
Supply Chain - Answer-The connected chain of all of the business entities, both internal
and external to the company, that perform or support the logistics function
Total Logistics cost Factors - Answer-Materials handling, warehouse costing, order
processing, inventory costs, stockout costs, transportation costs
Customer service Factors - Answer-Time, dependability, communication, convenience
Marketing channel - Answer-individuals and firms involved in the process of making a
product or service available for use or consumption by consumers or industrial users
Vertical marketing systems - Answer-Professionally managed and centrally coordinated
marketing channels designed to achieve channel economies and maximum marketing
impact
Dual distribution - Answer-an arrangement whereby a firm reaches different buyers by
employing two or more different types of channels for the same basic product
Intensive distribution - Answer-a form of market coverage whereby a product is made
available in as many outlets as possible
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