costs which are affixed to each unit of production
costs of payroll exclusively
Variable costs are:
not related to volume
the same in each quarter of the fiscal year
costs that are incurred for each customer
costs of payroll
costs that vary with each new employee hired
The most fundamental flaw of cost-plus pricing is that it:
fails to account for competition
ignores demand
places too much emphasis on competition
ignores industry-wide standard mark-up policies
requires too much effort in distinguishing between fixed and variable costs
Assume that the unit cost of making one doorstop is £1.32. For every unit sold, the firm wants 20% to represent profit. Applying the standard mark-up approach, what should the selling price be?
£1.65
£4.00
£5.23
£6.60
£6.75
The Music Shop sells CDs for £15.00. If the cost per CD is £11.00, what is The Music Shop's mark-up on selling price?
22%
27%
66%
73%
80%
If Mike's Burger Heaven increases its prices per bacon cheeseburger by 8% and consequently experiences a drop in demand of 4%, we can say that demand for Burger Heaven bacon cheeseburgers is:
unitary
inelastic
elastic
somewhat elastic
more information is needed
The two classic pricing strategies for new products are known as skimming and:
survival
penetration
pricing to achieve at target ROI
profit maximisation
market share maximisation
A skimming pricing policy works best when:
demand is inelastic
demand is declining
there are a number of large competitors
demand is elastic
the market is inefficient
A company effectively sets its prices higher than its competitors when:
the company's costs are higher
the competitors' costs are higher
the competitors sell through discount stores
the company's product is perceived as superior quality
the competitors' products are percieved as low-priced alternatives