chp 18 - Raven Boston Mr Neher MKT 3331-03 November 3 2011...

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Raven Boston Mr. Neher MKT 3331-03 November 3, 2011 Chapter 18 Q 2. Give an example of each of the major categories of pricing objectives? 1. Profitability objectives, including profit maximization and target returns. 2. Volume objectives, including sales maximization, and market share 3. Meeting competition 4. Prestige objective Q 4. Identify each factor influencing elasticity and give a specific example of how it affects the degree of elasticity in a good or service. 1. Availability of substitute or complementary goods 2. Classification of good or service as a luxury or a necessity 3. The portion of persons’ budget spent on an item 4. Time perspective Q 5. What are the practical problems in applying price theory concepts to actual pricing
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Unformatted text preview: decisions? 1. Many firms do not attempt to maximize profits 2. Difficult to accurately estimate demand curve 3. Inadequate training of managers and poor communication between economist and managers make it difficult to apply price theory in the real world. Q 7. How can locating the breakeven point assist in price determination? Determines Optimum Pricing to maximize your business surplus. The Revenue, Surplus, and number of sales are calculated for prices ranging from -50% to +50% of the current price. Pricing and Breakeven Analysis incorporates break-even analysis, break-even charts, break-even points and price elasticity to determine the impact of pricing on your business and optimum pricing....
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