MARKETING QUESTION. \\13. The key idea(s) for interpreting the prices is/are : a
ID: 381429 • Letter: M
Question
MARKETING QUESTION.
. The key idea(s) for interpreting the prices is/are : a. price endings b. price-quality inferences c. price references d. all of the above . For goods with elastic demand, lowering the price will the total revenue. a. b. c. L] decrease increase not affect 15. With accumulated production experience, the cost of production falls as a. the workers leam short-cuts b. the materials flow more smoothly c. costs of procurement drops d all of the above 16. In , high priced competitors tend to survive the price cutting strategies. low-quality trap a. b. fragile-market-share trap shallow-pockets trap c. d. price-war trapExplanation / Answer
13. The key idea for interpreting the prices is price references
Therefore correct answer is option c. price references
Therefore are two types of price references in consumers mind, one in internal price reference (related to products own price) and another is external price reference (prevailing market prices for similar products)
14. For the goods with elastic demand, lowering the prices will increase the revenue
Therefore correct answer is option b. increase
If demand for a goods is elastic, then lowering the prices will increase the revenue because the percentage drop in price will result in an even larger percentage increase in the quantity sold therefore total revenue will increase.
15. With accumulated production experience, the cost of production falls as the workers learn short-cuts, the materials flow more smoothly and costs of procurement drops.
Therefore correct answer is option d. all of the above
With accumulated production experience, the cost of production falls and it is known as experience curve or learning curve.
16. In Shallow-pockets trap, high priced competitors tend to survive the price cutting strategies
Therefore correct answer is option c. Shallow-pockets trap
In Shallow-pockets trap, higher-priced competitors match the lower prices but tend to survive the price cutting strategies because of higher cash reserves with them.
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