Chapter 9

Question 1

What is the key component of the business model which identifies how the company will earn income and make profits?

Answer 1

revenue model

Question 2

What is the income gained from sales of goods or services?

Answer 2

revenue

Question 3

What model is described by the number of items (units) sold by a company?

Answer 3

Unit sales revenue

Question 4

What is the variation of the unit sales model?

Answer 4

Razor-and-razor-blade

Question 5

What is a common way magazines and newspapers make revenue?

Answer 5

Advertising model

Question 6

Airbnb is a type of business that generates revenues through the ______ revenue model.

Answer 6

intermediation

Question 7

Why is the freemium revenue model becoming more popular?

Answer 7

It encourages widespread customer adoption.

Question 8

One way the free newspaper Metro makes money is ______.

Answer 8

featuring major events

Question 9

What is the pricing of a product or service above its market value to pay for loss of giving away a product or service for free or below market value?

Answer 9

direct cross-subsidies

Question 10

What is the value of goods sold when a sale takes place?

Answer 10

cost of goods sold

Question 11

What are the costs of running a business-such as rent, utilities, administration, and salaries-referred to as?

Answer 11

operating expenses

Question 12

What is the type of pricing strategy when prices are guided by other businesses selling the same or very similar products?

Answer 12

competition-led

Question 13

What is a loss leader?

Answer 13

offering a product below cost

Question 14

What is the type of pricing strategy involving calculating all the costs involved in manufacturing or delivering the product or service, plus all other expenses, plus expected profit based on sales volume?

Answer 14

cost-led

Question 15

What is the point where revenue equals cost?

Answer 15

breakeven

Question 16

SELECT ALL THAT APPLY. Meaningful advertising revenue generated in the digital world is dependent on which of the following?

Answer 16

attracting traffic and developing a dominant niche

Question 17

SELECT ALL THAT APPLY. What are key revenue drivers?

Answer 17

customer, price, and frequency

Question 18

The licensing revenue model is where companies generate revenue by selling high-quality, exclusive, valuable information to other parties.

Answer 18

False

Question 19

Multiparty business is a type of free model where one party is given a product or service for free while another party must pay for it.

Answer 19

True