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MGT 103 Quiz 3 (ch. 13-16) Questions
and Answers 100% Pass
importance of price to marketers - ✔✔only variable that can be changed quickly; related to total revenue
and profit
price - ✔✔the assignment of value, or the amount the consumer must exchange to receive the offering
profit formula - ✔✔total revenue - total costs OR (price x quantity sold) - total costs
understanding demand - ✔✔for most products, there is an inverse relationship between price and
demand
inelastic demand - ✔✔a change in price results in a little or no change in quantity demanded
elastic demand - ✔✔a change in price causes a great (opposite) change in quantity demanded
types of costs - ✔✔fixed costs and variable costs
fixed costs - ✔✔expenses that do not vary as a function of output volume (even if no production activity,
these remain); rent, mortgage payment, insurance, computers, salary of full-time workers, advertising
variable costs - ✔✔expenses that fluctuate in direct proportion to the output volume of units produced;
cost of raw materials, credit card fees, piece rate labor, sales commissions, delivery expenses
break-even point - ✔✔the point at which the costs of producing a product equal the revenue made from
selling the product
Author. Barrett, ©2025 All Rights Reserved.
, 2|Page
breakeven point (quantity) formula - ✔✔fixed costs/per-unit contribution to fixed costs (price-variable
costs)
contribution unit margin - ✔✔price - variable costs
contribution margin - ✔✔difference between total revenue and total variable costs
importance of price depends on... - ✔✔type of product, type of target market, purchase situation
Value combines a product's price and quality attributes - ✔✔customers use value to differentiate between
competing brands
pricing strategies - ✔✔Cost based, competitor based, demand based
cost based pricing - ✔✔calculate price based on company's costs. Markup can be stated as a percentage of
cost of making the product or a percentage of selling price
competitive based pricing - ✔✔benchmarking on competitor's prices
demand based pricing - ✔✔setting a price based on what consumers are willing to pay
pricing strategies (types) - ✔✔cost, demand, competition, dynamic pricing, new product strategies
psychological pricing - ✔✔buyers' expectations, internal reference prices, odd-even pricing, price lining
strategy, prestige pricing, loss-leader pricing, predatory pricing (illegal); bait and switch pricing (illegal);
false former price comparison (illegal)
endowment effect - ✔✔money back guarantee, free trial period, creating ownership
the 4 C's - ✔✔customer solution, customer cost, convenience, communication
six forces that surround the customer and affect the marketing mix - ✔✔economic, political, legal and
regulatory, technological, socio-culture, competitive
Author. Barrett, ©2025 All Rights Reserved.
MGT 103 Quiz 3 (ch. 13-16) Questions
and Answers 100% Pass
importance of price to marketers - ✔✔only variable that can be changed quickly; related to total revenue
and profit
price - ✔✔the assignment of value, or the amount the consumer must exchange to receive the offering
profit formula - ✔✔total revenue - total costs OR (price x quantity sold) - total costs
understanding demand - ✔✔for most products, there is an inverse relationship between price and
demand
inelastic demand - ✔✔a change in price results in a little or no change in quantity demanded
elastic demand - ✔✔a change in price causes a great (opposite) change in quantity demanded
types of costs - ✔✔fixed costs and variable costs
fixed costs - ✔✔expenses that do not vary as a function of output volume (even if no production activity,
these remain); rent, mortgage payment, insurance, computers, salary of full-time workers, advertising
variable costs - ✔✔expenses that fluctuate in direct proportion to the output volume of units produced;
cost of raw materials, credit card fees, piece rate labor, sales commissions, delivery expenses
break-even point - ✔✔the point at which the costs of producing a product equal the revenue made from
selling the product
Author. Barrett, ©2025 All Rights Reserved.
, 2|Page
breakeven point (quantity) formula - ✔✔fixed costs/per-unit contribution to fixed costs (price-variable
costs)
contribution unit margin - ✔✔price - variable costs
contribution margin - ✔✔difference between total revenue and total variable costs
importance of price depends on... - ✔✔type of product, type of target market, purchase situation
Value combines a product's price and quality attributes - ✔✔customers use value to differentiate between
competing brands
pricing strategies - ✔✔Cost based, competitor based, demand based
cost based pricing - ✔✔calculate price based on company's costs. Markup can be stated as a percentage of
cost of making the product or a percentage of selling price
competitive based pricing - ✔✔benchmarking on competitor's prices
demand based pricing - ✔✔setting a price based on what consumers are willing to pay
pricing strategies (types) - ✔✔cost, demand, competition, dynamic pricing, new product strategies
psychological pricing - ✔✔buyers' expectations, internal reference prices, odd-even pricing, price lining
strategy, prestige pricing, loss-leader pricing, predatory pricing (illegal); bait and switch pricing (illegal);
false former price comparison (illegal)
endowment effect - ✔✔money back guarantee, free trial period, creating ownership
the 4 C's - ✔✔customer solution, customer cost, convenience, communication
six forces that surround the customer and affect the marketing mix - ✔✔economic, political, legal and
regulatory, technological, socio-culture, competitive
Author. Barrett, ©2025 All Rights Reserved.
