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44A3694A4 Flashcards | StudBud
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44A3694A4
44A3694A4
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Answers
1
Which factor is not a direct determinant of demand?
Price of substitute products
Price
Indirect taxes (e.g., VAT and Goods and Services Tax)
Income
2
When a product is said to be price elastic, increasing prices will definitely lead to
A decrease in total revenue
A decrease in profits
An increase in sales revenue
An increase in total revenue
3
The pricing strategy where a product is sold at a very low price to get customers into a store
Loss leader
Market skimming
Penetration pricing
Promotional pricing
4
A product has price elasticity of demand greater than 1.0. Demand for the product is
Inelastic
Elastic
Unitary
Cross elastic
5
One of these things is not like the other
Government subsidies
Household income
Company tax
Costs of production
6
A firm that sets different prices to different consumer groups for the same product is using
Psychological pricing
Differentiation
Price discrimination
Market skimming
7
Given the price elasticity of demand values, which is least likely to belong to a luxury brand?
+0.5
+3.2
-0.3
-0.5
8
Basing price on the extra cost of making one additional unit of output
Absorption-cost pricing
Marginal-cost pricing
Contribution-cost pricing
Cost-plus pricing
9
When a product is said to be price inelastic, it will have aprice elasticity of demand value of
A positive value (i.e., greater than 0)
Great than 1
Approximately 1
Between 0 and 1
10
Price is charged based on the conditions in the market place and prices charged by competitors
Price leadership
Psychological pricing
Going-rate pricing
Cost-based pricing
11
Setting special low prices to gain market share or sell off excess stock
Loss leaders
Promotional pricing
Price leadership
Penetration pricing
12
Adopting a price skimming strategy enables firms to
Prevent competitors entering a market
Enter and become established in a new market
Maximise short-term sales margins
Maximise long-term sales revenue
13
Adding a fixed mark-up for profit to the unit price of a product
Absorption-cost pricing
Contribution-cost pricing
Cost-plus pricing
Marginal-cost price
14
Product pricing based on variable costs to make a contribution to fixed costs and profits
Absorption-cost pricing
Margin-cost price
Contribution-cost pricing
Cost-plus pricing
15
A product will have low price elasticity if
The market for the product is large
There is a small number of close substitutes
The market for the product is small
There is a large number of close substitutes
