How is breakeven analysis useful in marketing

Uses variable and fixed costs to evaluate pricing scenarios

What does the area between the marginal cost curve and the marginal revenue curve represent

Gain from producing an extra unit

What is marginal revenue

Additional revenue from increasing the quantity sold by 1 unit

How is cost analysis useful in marketing

It gives the minimum price needed to meet production costs

What is the definition of reservation price

The highest price a consumer is willing to pay

Which 2 concepts is value based pricing based off of

Reservation price and reference price

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Questions 10

Answers

1
Prospect theory states that consumer response to gains vs losses is asymmetric
True
False
2
How is breakeven analysis useful in marketing
Shows what price the product needs to be to breakeven from production costs
Evaluates different product costs
Incorporates fixed costs into pricing decisions
Uses variable and fixed costs to evaluate pricing scenarios
3
What does the area between the marginal cost curve and the marginal revenue curve represent
The maximum amount consumers are willing to pay for the product
The cost of producing an extra unit
The difference between the production costs and selling price
Gain from producing an extra unit
4
What is marginal revenue
Additional revenue from increasing the price
Additional revenue from increasing the quantity sold by 1 unit
Revenue from increasing the quantity sold by 1 unit
Revenue from increasing the price
5
How is cost analysis useful in marketing
It gives the minimum price needed to meet production costs
It gives the expected price of a product
It gives the maximum price a customer is willing to pay
It gives the most optimal price of a product
6
The relationship between quantity and price is shown using the equation Q=50-P, If 49 units are sold what is the price
25
1
50
99
7
What is the definition of reservation price
The highest price a consumer is willing to pay
The amount of money left over after accounting for production costs
The expected price of a product
The difference in price between competing products
8
Marginal cost curves are generally upwards sloping
False
True
9
Value based pricing looks at price from an internal perspective of how to recover costs
True
False
10
Which 2 concepts is value based pricing based off of
Selling price and actual price
Competition price and gain price
Reservation price and reference price
Marginal price and demand price

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