Marketing Ch.13

Question 1

Value

Answer 1

the ration of precieved benifits to price or value=benifits/price

Question 2

value pricing

Answer 2

the practice of simultaneously increasing product and service benefits while maintaining or decreasing price

Question 3

profit equation

Answer 3

profit=total revenue-total cost = (unit price*quantity sold)+(fixed cost + variable cost)

Question 4

Pricing objectives

Answer 4

specifying the role of price in an organizations marketing and strategic plans

Question 5

pricing constraints

Answer 5

the factors that limit the range of prices a firm may set

Question 6

demand curve

Answer 6

graph relating the quantity sold and price

Question 7

demand factors

Answer 7

factors that determine consumer’s willingness and ability to pay for products and services

Question 8

Total Revenue(TR)

Answer 8

TR=P*Q
P=unit price
Q=quantity sold
Total money recieved from the sale of a product

Question 9

Average Revenue

Answer 9

is the average amount of money received for selling one unit of a product, or simply the price of that unit. Average revenue is the total revenue divided by the quantity sold:
AR=(TR)/Q = P

Question 10

Marginal Revenue(MR)

Answer 10

is the change in total revenue that results from producing and marketing one additional unit of a product

MR=(change in TR)/(1 unit increase in Q)=(deltaTR/deltaQ)= slope of TR curve

Question 11

Price Elasticity of Demand-

Answer 11

percent change in quantity demand relative to a percent change in price

(% change in quantity demanded)/(% change in price)

Question 12

Elastic Demand

Answer 12

when a 1 percent decrease in price produces more than a 1% increase in quantity demanded (increasing sales revenue)

Question 13

Inelastic Demand-

Answer 13

exists when a 1 percent decrease in price produces less than a 1% increase in quantity demanded (decreasing sales revenue)

Question 14

Unitary Demand-

Answer 14

exists when the % change is identical

Question 15

more substitues

Answer 15

more price elastic

Question 16

product and services considere to be necessities

Answer 16

price inelastic

Question 17

items that require a large cash outlay compared with a person’s disposable income

Answer 17

price elastic

Question 18

Total Cost TC

Answer 18

total expense incurred by a firm in producing/marketing a product
TC=FC+VC

Question 19

Fixed Costs(FC)

Answer 19

sum of expenses of the firm that are stable and do not hcange with the quantity of a product that is produced and sold. (ie rent)

Question 20

Variable Cost (VC

Answer 20

the sume of the expenses of the firm that vary directly with the quantity of a product that is produced and sold.

Question 21

Unit Variable Cost (UVC)

Answer 21

vairable cost expressed on a per unit basis for a product

UVC=VC/Q

Question 22

Marginal Cost (MC)

Answer 22

change in total cost that resuluts form producting ad marketing one additional unit of a product

MC=(change in TC/1 unit increase in Q)=(deltaTC/deltaQ)= slope of TC curve

Question 23

Margnal Analysis

Answer 23

people will continue to do something as long as the incremental return exceeds the incremental cost

Question 24

Break Even analysis

Answer 24

analyzes the relationship between total revenue and total cost to determine profitability at various levels of output

Question 25

Break even point

Answer 25

quantity at which total revenue=total cost

BEP=(fixed cost/(unit price-unit vairable cost))= FC/P-UVC