7 Written Questions

1. The money or other considerations (including other products and services) exchanged for the ownership or use of a product or service.
2. 1. Consumer tastes
   2. Price and availability of similar products
   3. Consumer income
3. It exists when the percentage change in price is identical to the percentage change in quantity demanded so that sales revenue remains the same. Price elasticity is equal to 1.
4. The ratio of perceived benefits to price.
5. The practice of exchanging products and services for other products and services rather than for money.
6. The total expense incurred by a firm in producing and marketing a product. It is the sum of fixed cost and variable cost.
7. It exists when a 1% decrease in price produces more than a 1% increase in quantity demanded, thereby actually increasing sales revenue.

6 Multiple Choice Questions

1. It involves specifying the role of price in an organization's marketing and strategic plans.
   1. Demand curve
   2. Price constraints
   3. Price objectives
   4. Price
2. The sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold. As the quantity sold doubles, the ____ ____ doubles. Eg. the direct labor and direct materials used in producing the product and the sales commissions that are tied directly to the quantity sold.
   1. Unit variable cost
   2. Variable cost
   3. Total cost
   4. Marginal cost
3. The quantity at which total revenue and total cost are equal. Profit then comes from all units sold beyond this.
   1. Break-even analysis
   2. Variable cost
   3. Price constraints
   4. Break-even point (BEP)
4. It exists when a 1% decrease in price produces less than a 1% increase in quantity demanded, thereby actually decreasing sales revenue.
   1. Price elasticity of demand
   2. Inelastic demand
   3. Elastic demand
   4. Unitary demand
5. Variable cost expressed on a per unit basis for a product.
   1. Marginal cost
   2. Variable cost
   3. Unit variable cost
   4. Total cost
6. The sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold. Eg. rent on the building, executive salaries, and insurance
   1. Total cost
   2. Variable cost
   3. Fixed cost
   4. Marginal cost

6 True/False Questions

1. Value-pricing → The ratio of perceived benefits to price.

   True        False

2. Marginal cost → The sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold. As the quantity sold doubles, the ____ ____ doubles. Eg. the direct labor and direct materials used in producing the product and the sales commissions that are tied directly to the quantity sold.

   True        False

3. Price elasticity of demand → The percentage change in quantity demanded relative to a percentage change in price. (sensitive and very responsive)

   True        False

4. Break-even analysis → The quantity at which total revenue and total cost are equal. Profit then comes from all units sold beyond this.

   True        False

5. Price constraints → It involves specifying the role of price in an organization's marketing and strategic plans.

   True        False

6. Demand curve → The ratio of perceived benefits to price.

   True        False