Outcome # 2/// Cost// competition and channels

Question 1

3. Cost

Answer 1

Variable cost
Those costs, primarily labour and materials, that vary with production volume

Fixed costs
Those costs that remain essentially at the same level, regardless of any changes in the volume of production.

Total Cost
Sum of variable and fixed cost

Question 2

Break-even point

Answer 2

The point at which the number of units sold generates just enough revenue to equal the total costs; at this point, profits are zero.

contribution per unit
Equals the price less the variable cost per unit; variable used to determine the break-even point in units.

Question 3

4. Competition

Answer 3

monopoly
oligopoly
monopolistic competition
pure competition

Question 4

Monopoly

Answer 4

Occurs when only one firm provides the product or service in a particular industry.

Question 5

Oligopoly

Answer 5

Occurs when only a few firms dominate a market

Price war.
Occurs when two or more firms compete primarily by lowering their prices.

Question 6

Monopolistic competition

Answer 6

Occurs when many firms sell closely related but not homogeneous products; these products may be viewed as substitutes but are not perfect substitutes.

Question 7

Pure competition

Answer 7

Occurs when different companies sell commodity products that consumers perceive as substitutable; price usually is set according to the laws of supply and demand.

Question 8

5. Channel Members

Answer 8

Different interest, manufacturers wants good image//high prices
Retailers/ Low price*// high sales

Grey market.
Employs irregular but not necessarily illegal methods; generally, it legally circumvents authorized channels of distribution to sell goods at prices lower than those intended by the manufacturer.