MGT 103 Final Bates Questions And
Answers
process of setting prices 1. identify pricing objectives and constraints
2. estimate demand and revenue
3. determine cost, volume, and profit relationships
4. select an approximate price level
5. set list or quoted price
6. make special adjustment...
, MGT 103 Final Bates Questions And
Answers
demand curve graph that relates the quantity sold and price, showing the maximum
number of units that will be sold at a given price
consumer tastes depends on demographics, culture, and technology
-can change quickly
price and availability of similar products price falls, more people buys
-price of substitute falls or availability increases, demand for normal food falls
consumer income consumers income increase, demand for a product will also increase
demand factors factors that determine consumers willingness and ability to pay for
products and services
price elasticity of demand = percentage change in quantity demanded/ percentage change
in price
, MGT 103 Final Bates Questions And
Answers
elastic demand 1% decrease in price produces more than 1% increase in quantity
demanded, thereby increasing total revenue
inelastic demand 1% decrease in price produces less than a 1% increase in quantity
demanded, thereby decreasing total revenue.
total revenue total money recieved from the sale of a product
=P (price) x Q (quantity sold)
4 cost concepts total cost, fixed cost, variable cost, and unit variable cost
break-even analysis analyzes the relationship between total revenue and total cost to
determine profitability at various levels of output
break even point (BEP) quantity at which total revenue and total cost are equal
= Fixed cost/ unit price -unit variable cost
break even chart depicts graphic presentation of the break-even analysis
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