In this case generic orange juice costs less than do

This preview shows page 93 - 96 out of 163 pages.

and vice versa. In this case, generic orange juice costs less than do the national brands. AACSB: Analytic Blooms: Apply Difficulty: 3 Hard Learning Objective: 13-03 Explain price elasticity. Topic: 5 Cs of Pricing 80. (p. 275) Rodi owns Hallman's auto repair service. He has observed over the years that customers keep their high-mileage cars longer when the economy is doing poorly, creating demand for his maintenance and repair service. Rodi has observed the impact of __________ on demand for his service. A. breakeve n points B. the price inelasticity ratio C. the income effect D. target profit pricing E. cross-price elasticity This is an example of the income effect, where demand tends to shift from lower-priced to higher- priced products as consumers' income increases, and vice versa. In this case, keeping one's car and having it repaired costs less than getting a new car. AACSB: Analytic Blooms: Apply Difficulty: 2 Medium Learning Objective: 13-03 Explain price elasticity. Topic: 5 Cs of Pricing 81. (p. 275) The more substitutes that exist in a market: A. the lower the price elasticity for each product. B. the greater the income elasticity for each product. C. the easier it will be to utilize a target profit pricing strate D. the more sensitive consumers will be to changes in the
Image of page 93

Subscribe to view the full document.

E. the more likely the market will be characterized as an o Substitutes, by offering reasonable alternatives, typically make consumers more sensitive to price changes. AACSB: Analytic Blooms: Understand Difficulty: 2 Medium Learning Objective: 13-03 Explain price elasticity. Topic: 5 Cs of Pricing 82. (p. 276) Brad always buys and uses Nike brand golf balls. If he finds a Titleist or Callaway ball in the rough, he gives it away. Brand loyal golfers like Brad allow Nike to charge a higher price and not lose many sales. By building a strong brand, Nike has effectively: Brand loyal customers like Brad are less sensitive to price increases. The more such customers exist in a market, the less price elastic demand will be. AACSB: Analytic Blooms: Apply Difficulty: 2 Medium Learning Objective: 13-03 Explain price elasticity. Topic: 5 Cs of Pricing
Image of page 94
83. (p. 276) Marketers spend millions of dollars annually trying to create or reinforce brand loyalty. Brand loyalty changes the demand curve for the firm's products
Image of page 95

Subscribe to view the full document.

Image of page 96
You've reached the end of this preview.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern