Ans t pts 1 ref 300 obj 19 3 type app top aacsb

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ANS: T PTS: 1 REF: 300 OBJ: 19-3 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Pricing 12. If the formula for elasticity results in a measure of elasticity (E) greater than 1, demand is said to be in- elastic. ANS: F If E is greater than 1, demand is elastic. PTS: 1 REF: 300 OBJ: 19-3 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Pricing 13. If the formula for elasticity results in a measure of elasticity (E) equal to 1, the increase in sales exactly offsets the decrease in price so that total revenue remains the same. ANS: T PTS: 1 REF: 300 OBJ: 19-3 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Pricing 14. When many substitute products are available, demand is inelastic. ANS: F
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Demand is elastic when there are many substitute products available. PTS: 1 REF: 301 OBJ: 19-3 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Pricing 15. Yield management systems (YMS) were first used by Internet service providers. ANS: F Yield management systems (YMS) were first developed in the airline industry. PTS: 1 REF: 302 OBJ: 19-4 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Pricing 16. Yield management systems can only be used by service industries. ANS: F As the popularity of yield management systems increases, their use is spreading to manufacturing (in terms of production capacity). PTS: 1 REF: 302 OBJ: 19-4 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Pricing 17. Firms that price their products solely on the basis of costs are adhering to the marketing concept. ANS: F Firms pricing their products solely on the basis of costs are not following the marketing concept. PTS: 1 REF: 302 OBJ: 19-5 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Pricing 18. Variable costs vary with changes in the level of output, whereas marginal costs do not vary as output changes. ANS: F Marginal costs are the changes in total costs associated with a one-unit change in output. PTS: 1 REF: 304 OBJ: 19-5 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Pricing 19. Costs that do not change as output is increased or decreased are called stable costs. ANS: F These are called fixed costs. PTS: 1 REF: 302 OBJ: 19-5 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Pricing 20. Markup pricing, adding an amount to cost to cover expenses and profit, is one of the most common pricing methods used by intermediaries to establish a selling price. ANS: T PTS: 1 REF: 302 OBJ: 19-5 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Pricing 21. A firm has maximized its profits when its marginal revenue exceeds its marginal cost.
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ANS: F A firm has maximized its profits when its marginal revenue equals its marginal cost. PTS: 1 REF: 304 OBJ: 19-5 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Pricing 22. Break-even analysis determines what sales volume must be reached for a product before the company's total revenue equals total costs.
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  • Spring '10
  • Patterson
  • Supply And Demand, AACSB Reflective Thinking, TB&E Model Pricing

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