BA370 Olson SDSU Exam 3/ Final Test
Questions With 100% Correct Answers
2025-2026 Updated.
price - Answer the overall sacrifice a consumer is willing to make to acquire a specific
product or service; the most challenging of the 4 P's to manage b/c it's least understood; does
NOT generate cost, but generates revenue
break-even analysis - Answer technique that enables managers to examine the relationships
among cost, price, revenue, and profit (assesses fixed costs, total costs, total revenue)
break-even point - Answer point at which the number of units sold generates just enough
revenue to equal the total costs
competitor orientation - Answer when firms strategize according to the premise that they
should measure themselves against their competition
competitive parity - Answer firms set prices that are similar to their leading competitors;
maturity stage
status quo pricing - Answer changes prices only to meet those of the competition
value - Answer the relationship between a product's benefits and the consumer's costs
elasticity of demand - Answer % change in quantity demanded / % change in price
demand curve - Answer shows how many units of a product or service consumers will
demand during a specific period of time at different prices
cross-price elasticity - Answer the % change in the quantity of product A demanded
compared with the % change in price of product B
complementary products - Answer products whose demands are positively correlated
,profit orientation - Answer firms implement this when their company objective is making a
profit
target profit pricing - Answer when firms have a specific profit goal as their overriding
concern
maximizing profits - Answer strategy implemented when mathematical model can be applied
to set the price at which profits are maximized
target return pricing - Answer when firms are interested in the rate at which their profits are
generated relative to their investments (usually expressed in % of sales)
sales orientation - Answer these firms believe that increasing sales will help the firm more
than will increasing profits
premium pricing - Answer the firm deliberately prices a product above the prices set for
competing products to capture those customers who always shop for the best or for whom
price doesn't matter
customer orientation - Answer when a firm sets its pricing strategy based on how it can ass
value to its products or services
5 c's of pricing - Answer customers, costs, competition, channel members, company
objectives
channel members - Answer manufacturers, wholesalers, retailers; each adds value
monopolistic competition - Answer when there are many firms competing for customers in a
given market but their products are different
monopoly - Answer when one firm provides the product or service in a particular industry
oligopolistic competition - Answer when only a few firms dominate
, fixed costs - Answer the costs that remain essentially the same (rent, utilities, insurance,
salaries)
total cost - Answer variable costs + fixed costs
income effect - Answer refers to the change in the quantity of a product demanded by
consumers due to a change in their income
prestige products - Answer when consumers purchase for their status rather than their
functionality
contribution per unit - Answer price - the variable cost per unit
gray market - Answer employs irregular methods
total revenue - Answer price x quantity
total variable costs - Answer variable cost per unit x quantity
predatory pricing - Answer when a firm sets a very low price for one or more of its products
with the intent to drive its competition out of business; outlawed by the Sherman Act and
Federal Trade Commission Act
price war - Answer when two or more firms compete primarily by lowering their prices to
conserve their market share; end of summer price war between Pepsi and Coke on 2L bottles
pricing strategy - Answer long-term approach to setting prices broadly in an integrative effort
based on the 5 C's; cost-based, competition-based, value-based
lease - Answer consumers pay a fee to purchase the right to use a product for a specific
amount of time; never owns the product, just rents it
rebates - Answer when the manufacturer issues a refund as a portion of the purchase price
Questions With 100% Correct Answers
2025-2026 Updated.
price - Answer the overall sacrifice a consumer is willing to make to acquire a specific
product or service; the most challenging of the 4 P's to manage b/c it's least understood; does
NOT generate cost, but generates revenue
break-even analysis - Answer technique that enables managers to examine the relationships
among cost, price, revenue, and profit (assesses fixed costs, total costs, total revenue)
break-even point - Answer point at which the number of units sold generates just enough
revenue to equal the total costs
competitor orientation - Answer when firms strategize according to the premise that they
should measure themselves against their competition
competitive parity - Answer firms set prices that are similar to their leading competitors;
maturity stage
status quo pricing - Answer changes prices only to meet those of the competition
value - Answer the relationship between a product's benefits and the consumer's costs
elasticity of demand - Answer % change in quantity demanded / % change in price
demand curve - Answer shows how many units of a product or service consumers will
demand during a specific period of time at different prices
cross-price elasticity - Answer the % change in the quantity of product A demanded
compared with the % change in price of product B
complementary products - Answer products whose demands are positively correlated
,profit orientation - Answer firms implement this when their company objective is making a
profit
target profit pricing - Answer when firms have a specific profit goal as their overriding
concern
maximizing profits - Answer strategy implemented when mathematical model can be applied
to set the price at which profits are maximized
target return pricing - Answer when firms are interested in the rate at which their profits are
generated relative to their investments (usually expressed in % of sales)
sales orientation - Answer these firms believe that increasing sales will help the firm more
than will increasing profits
premium pricing - Answer the firm deliberately prices a product above the prices set for
competing products to capture those customers who always shop for the best or for whom
price doesn't matter
customer orientation - Answer when a firm sets its pricing strategy based on how it can ass
value to its products or services
5 c's of pricing - Answer customers, costs, competition, channel members, company
objectives
channel members - Answer manufacturers, wholesalers, retailers; each adds value
monopolistic competition - Answer when there are many firms competing for customers in a
given market but their products are different
monopoly - Answer when one firm provides the product or service in a particular industry
oligopolistic competition - Answer when only a few firms dominate
, fixed costs - Answer the costs that remain essentially the same (rent, utilities, insurance,
salaries)
total cost - Answer variable costs + fixed costs
income effect - Answer refers to the change in the quantity of a product demanded by
consumers due to a change in their income
prestige products - Answer when consumers purchase for their status rather than their
functionality
contribution per unit - Answer price - the variable cost per unit
gray market - Answer employs irregular methods
total revenue - Answer price x quantity
total variable costs - Answer variable cost per unit x quantity
predatory pricing - Answer when a firm sets a very low price for one or more of its products
with the intent to drive its competition out of business; outlawed by the Sherman Act and
Federal Trade Commission Act
price war - Answer when two or more firms compete primarily by lowering their prices to
conserve their market share; end of summer price war between Pepsi and Coke on 2L bottles
pricing strategy - Answer long-term approach to setting prices broadly in an integrative effort
based on the 5 C's; cost-based, competition-based, value-based
lease - Answer consumers pay a fee to purchase the right to use a product for a specific
amount of time; never owns the product, just rents it
rebates - Answer when the manufacturer issues a refund as a portion of the purchase price
