MGT 103 - Quiz 3 Ch. 13-16 and podcasts Questions And Answers
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Course
MGT 103
Institution
MGT 103
MGT 103 - Quiz 3 Ch. 13-16 and podcasts
Questions And Answers
For most products, there is an inverse relationship between price and demand. How would you
get the increase in demand without changing price? Change the quantity w out changing
the price, change another one of the Ps, change promo...
MGT 103 - Quiz 3 Ch. 13-16 and podcasts
Questions And Answers
For most products, there is an inverse relationship between price and demand. How would you
get the increase in demand without changing price? Change the quantity w out changing
the price, change another one of the Ps, change promotion, how its being marketed, who it is
targeting and how to change that, can change place, do we wanna change how we distribute it?
Inelastic Demand - A change in price results in a little or no change
in quantity demanded (change price form P1 to P2 the demand decreases by a small amount, not
elastic, doesnt move) (i.e gas, when the price of gas goes up people buy it anyways even if they
arent happy, tuition fees)
- A situation in which an increase or a decrease in price will not significantly affect demand for
the product
Elastic Demand - A change in price causes a great (opposite) change
in quantity demanded (increase price same amount but quantity changes LARGE amount)
- A situation in which consumer demand is sensitive to changes in price
How would you classify the following in terms of price elasticity?
GASOLINE inelastic
, MGT 103 - Quiz 3 Ch. 13-16 and podcasts
Questions And Answers
How would you classify the following in terms of price elasticity?
MOVIE TICKETS elastic
How would you classify the following in terms of price elasticity?
AIR TRAVEL depends
How would you classify the following in terms of price elasticity?
COFFEE Depends, if you buy coffee cause u love coffee people will buy aways but if you
are buying for its purpose chose something cheaper
Types of Costs fixed and variable
fixed costs Fixed costs don't change with the number of units produced, whether it's 100
or 10,000. Thus the average fixed cost per unit will always decrease as the number of units
produced increases (Fixed Costs = expenses that do not vary as a function of output volume
(even if no production activity, these remain))
, MGT 103 - Quiz 3 Ch. 13-16 and podcasts
Questions And Answers
variable costs Variable costs are those production costs that are tied to the number of units
produced and thus vary depending on volume.
(Variable costs = expenses that fluctuate in direct proportion to the output volume of units
produced)
Variable vs. Fixed Costs - Variable costs = expenses that fluctuate in direct proportion to
the output volume of units produced
--Cost of raw materials, credit card fees, piece rate labor, sales commissions, delivery expenses
- Fixed Costs = expenses that do not vary as a function of output volume (even if no production
(Dont increase dependent on how many units decrease or we sell, dont think fixed costs cant
increase because they can, ie the rent a person pays is a certain amount but the landlord can
change the price, doesnt have to do with units sold, etc.)
- Generally higher proportion of variable costs to fixed costs is looked at more favorably by
investors because a profit can be generated at a low sales level (there are few fixed costs that
must be paid each accounting period)
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