Chapter 13

Question 1

Price is an indicator of:

Answer 1

Value

Question 2

Value=

Answer 2

Value= Perceived Benefits/ Price
- Pay more, Get More

Question 3

Value-Pricing

Answer 3

Pay less, Get more

Question 4

Pricing Objectives #1:

Answer 4

1. Profit
   -Managing for Long-Run Profits (Low prices, Increase Market Share)
   - Managing for Current Profit ( High Price for Short-Run)
   - Target Return (ROI)

Question 5

Pricing Objectives #2-4

Answer 5

2. Sales ($)
3. Market Share ($ or #)
4. Unit Volume (#)

Question 6

Price Elasticity of Demand=

Answer 6

Price Elasticity of Demand (E)= Percentage Change in Quantity Demanded / Percentage Change in Price

Question 7

Types of Demands in Price Elasticity of Demand

Answer 7

• Elastic Demand
• Inelastic Demand
  -Unitary Demand

Question 8

Decisions Involving Price Elasticity:

Answer 8

• Product/Service Substitutes (More Price elastic)
• Products/Services Considered Necessities (More Price inelastic)
• Items that Require Large Cash Outlays (More Price Elastic)