GB 350 Ole Miss- Final Exam Questions and Answers

GB 350 Ole Miss- Final Exam
Questions and Answers
Profit Maximization - ANSWER-The absolute maximum price a market is willing to
tolerate

Satisfactory Profits - ANSWER-A reasonable price point for both the customer and
the company

Target Return on Investment - ANSWER-Based on the amount an investor
(shareholder) expects to gain or recover from their investment

Sales- Oriented Pricing Objective (subcategories) - ANSWER--Market Share
-Sales Maximization

Market Share - ANSWER-company prices to gain as much market share (best
margins) possible- how much money you're trying to SPEND

Sales Maximization - ANSWER-Pricing to sell as much as possible (most
customers)- How much money you're trying to MAKE

Equation for Elasticity of Demand - ANSWER-% change in quantity demanded / %
change in price

Status Quo Pricing Objective - ANSWER--Maintain existing prices
-Meet competition's prices

The two factors of Demand Determinant of Price - ANSWER--Demand
-Supply

How Supply & Demand Establish Price - ANSWER--Price Equilibrium
-Elasticity of Demand

Price Equilibrium - ANSWER-The price at which demand and supply are equal

Elasticity of Demand - ANSWER-Consumers' responsiveness or sensitivity to
changes in price

Types of Elasticity of Demand - ANSWER--Elastic Demand
-Inelastic Demand
-Unitary Elasticity

Elastic Demand - ANSWER-Consumers buy more or less of a product depending on
the price