b competitive pricing advantages one firm has over another c different pricing

B competitive pricing advantages one firm has over

  • Texas State University
  • PSY 1310
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  • GeneralFreedomGorilla9522
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b. competitive pricing advantages one firm has over another. c. different pricing strategies for each of the firm's products. d. factors that limit the range of prices a firm may set. e. another name for demand curves. Answer: d Page: 271 Rationale: Key term definition—pricing constraints 799
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12-148 PRICING CONSTRAINTS CONCEPTUAL Which term describes factors that affect price and include: newness of the product, demand for the product class, and competitors’ prices? a. price fixings b. pricing constraints c. price elasticities d. pricing demands e. pricing margins Answer: b Page: 271 Rationale: Pricing constraints are factors that limit the range of price a firm may set, such as newness of the product, demand for the product class, product, and brand, cost of producing and marketing the product, competitors’ prices, and legal and ethical considerations. 12-149 PRICING CONSTRAINTS CONCEPTUAL Which of the following factors would act as a constraint on pricing? a. The product is in high demand. b. The product is in the maturity stage of its product life cycle. c. The cost of the product to the firm is $100. d. Competitors' prices average $300 per unit. e. All of the above factors would act as constraints on pricing. Answer: e Page: 271 Rationale: Pricing constraints are factors that limit the range of price a firm may set, such as newness of the product (alternative b), demand for the product class, product, and brand (alternative a), cost of producing and marketing the product (alternative c), competitors’ prices (alternative d), and legal and ethical considerations. Thus all of the alternatives are factors that would act as constraints on pricing. 12-150 PRICING CONSTRAINTS: STAGE IN PRODUCT LIFE CYCLE CONCEPTUAL Often, the earlier a product is in its life cycle: a. the lower the price the firm must charge. b. the more competition it has. c. the greater the flexibility to charge a higher price. d. the lower the production costs. e. the lower the unit variable cost. Answer: c Page: 271 Rationale: Pricing constraints are factors that limit the range of price a firm may set, such as newness of the product, demand for the product class, product, and brand, cost of producing and marketing the product, competitors’ prices, and legal and ethical considerations. Early in the product life cycle a firm can often charge a higher price because there are few, if any, substitutable products. This is an example of one of the pricing constraints the firm should consider. 800
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12-151 PRICING CONSTRAINTS: STAGE IN PRODUCT LIFE CYCLE APPLICATION Pharmacist and new father Kenneth Kramm wanted his son to take his medicine, but it was a battle. As a result Kramm developed FLAVORx, a liquid medicine-flavoring system that can mask the taste or smell of medicine. FLAVORx tastes of strawberry or grape and has no effect on the medicinal value of the drug to which it is added. It is the first product of its kind. Because Flavorx is in the __________ stage of the product life cycle, the price of the medicine-flavoring system should be __________ than the price that would usually be charged.
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  • Fall '07
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  • Pricing, Katherine, retail price, Energizer, Hallmark

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