15 Questions
What is the formula for calculating the final price?
Final price = List price - (Discounts and allowances) + Extra fees
What concept is used to indicate value when paired with the perceived benefits of a product or service?
Value based pricing
What is the ratio used to calculate value?
(Perceived benefits / Price)
Which type of pricing involves increasing product and service benefits while maintaining or decreasing the price?
Value based pricing
What is it called when goods are exchanged for goods or services without involving money?
Counter trade
Why is pricing considered a critical decision made by a marketing executive?
It has a direct effect on firm's profits
What is the formula for calculating profit?
Total revenue - Total cost
In setting prices, what is the first step according to the given text?
Identifying pricing constrains and objectives
Which factor influences the price of a product based on its newness?
Newness of the product
What is the pricing objective that focuses on increasing sales revenue?
Profit maximization
What technique analyzes the relationship between total revenue and total cost to determine profitability at various levels of outputs?
Breakeven analysis
What is the quantity at which total revenue equals total cost, and beyond which profit occurs?
Break even point
Which method involves setting the highest price that customers really desiring the product are willing to pay?
Skimming pricing
What is step 2 in setting prices according to the given text?
Estimate demand and revenue
What does marginal analysis study?
Whether revenue received from the sale of an additional product is greater than the additional cost of producing and marketing it.
Test your knowledge of pricing concepts including the price equation, discounts, allowances, and extra fees. Explore the exchange of money, goods, and services in the context of pricing strategies.
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