Managerial Economics Questions

Which of the following costs do not vary directly with the volume of sales or production?a.) Fixed costs b.) Marginal costsc.) Variable costsd.) Segmented costs

Which of the following is the correct formula for the Price Elasticity of Demand?a.) Percentage change of demand/percentage change in priceb.) Percentage change in price/percentage change in demandc.) Percentage change in supply/percentage change in demandd.) Percentage change in demand/percentage change in supply

___________ include all incremental costs related to a new product, including incremental overhead.a.) Variable costsb.) Fixed costsc.) Marginal costsd.) Fully loaded costs

Pricing at what the market will bear is not useful advice because the market will bear many prices.

A _______________ demand curve occurs when volume increases significantly as price decreases.a.) price-elasticb.) price-inelasticc.) positive-slopingd.) negative-sloping

According to the text, fixed costs do not vary directly with the volume of sales or production

In _______________, the product cost is incremented upward by a margin to establish the selling price.a.) conjoint pricingb.) cost-plus pricingc.) competitive pricingd.) comparative pricing

Product, promotion, distribution, and service are the non-price elements in the marketing mix that a firm uses to create value for customers.

Perceived value is created primarily by all of the following elements in the marketing mix EXCEPT:a.) Productb.) Promotionc.) Priced.) Distribution

Which of the following is the first step in using the perceived value analysis method to measure an offer's perceived value?a.) Identify customers' required benefits and valuesb.) Weigh benefits and valuesc.) Rate each offer from the various suppliersd.) Develop benefit/value scores

In which of the following approaches to measuring customer value does the firm offer a test product at different prices in different market areas, like geographic locations?a.) Price experimentb.) Dollarmetric methodc.) Direct value assessmentd.) Economic analysis

_______________ is focused internally and does not take into account external market realities.a.) Conjoint pricingb.) Cost-plus pricingc.) Competitive pricingd.) Comparative pricing

Many grocery items are examples of which of the following market-level price sensitive situations?a.) price-elastic b.) price-inelasticc.) positive-slopingd.) negative-sloping

Which of the following is NOT mentioned in the text as an advantage of cost-plus pricing systems?a.) They are legally acceptable and in certain cases may be required.b.) If sales are made, they should be profitable with this pricing method.c.) Assuming costs are known, the pricing task is simple.d.) Prices are matched to market realities.

In skim pricing, the firm prices close to costs; it expects high market share in the short run with profits delayed and ultimately secured from high volumes and low margins.

According to the text, cost-plus pricing is focused internally and does not take into account external market realities.

Dollarmetric pricing is often used in situations such as supermarket pricing where many different products must be priced.

Grocery store items are examples of products with price-elastic demand.

Price elasticity of demand helps estimate market demand when price changes

Perceived value analysis is a method of estimating the price equivalence of the firm's product versus competitive products.