Refer to specialty cakes although many factors

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111. Refer to Specialty Cakes. Although many factors determine the prices charged by Cecilia Villaveces Cakes, the two primary determinants are: a. costs of manufacturing and distribution costs b. stage of the product life cycle and costs to the consumers c. the demand for the good and cost to the seller d. demand by the consumer and perceived quality e. distribution and promotion strategies used by the cake maker ANS: C If there was reduced demand, then Cecilia would have to lower prices. Also, she must charge for the time, energy, and resources that go into each cake. PTS: 1 REF: 298-299 OBJ: 19-3 TOP: AACSB Reflective Thinking | TB&E Model Pricing NAR: Specialty Cakes 112. Refer to Specialty Cakes. Many party planners in the Southeast will only use Cecilia Villaveces Cakes at their parties--no matter what the price is. They know that Cecilia's cakes can make a party a success. Moreover, the cakes are what people remember most about the parties. From this description, you should assume Cecilia Villaveces Cakes have a(n): PTS: 1 REF: 300 OBJ: 19-3 TOP: AACSB Reflective Thinking | TB&E Model Pricing NAR: Specialty Cakes 113. Refer to Specialty Cakes. Which of the following is the BEST example of a fixed cost for Cecilia Vil- laveces Cakes? PTS: 1 REF: 302 OBJ: 19-5 TOP: AACSB Reflective Thinking | TB&E Model Pricing NAR: Specialty Cakes
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114. Refer to Specialty Cakes. Which of the following is the BEST example of a variable cost for Cecilia Villaveces Cakes? PTS: 1 REF: 302 OBJ: 19-5 TOP: AACSB Reflective Thinking | TB&E Model Pricing NAR: Specialty Cakes 115. Refer to Specialty Cakes. To set the price of her cakes, Cecilia simply doubles her costs, which often include several hours of labor and expensive raw materials. This method of price setting is called: a. mark-on pricing b. premium pricing c. keystoning d. add-on pricing e. superimposed pricing ANS: C The practice of marking prices up 100 percent is called keystoning. PTS: 1 REF: 304 OBJ: 19-5 TOP: AACSB Reflective Thinking | TB&E Model Pricing NAR: Specialty Cakes
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