Companies Use a Price Premium to Assess Whether Their Products

question 130

Multiple Choice

Companies use a price premium to assess whether their products and brands are priced above, at, or below the market. This price premium equals

• A) unit volume market share for a brand divided by dollar sales market share for a brand, minus one.
• B) dollar sales market share for a brand divided by unit volume market share for a brand, plus one.
• C) dollar sales market share for a brand divided by unit volume market share for a brand, minus one.
• D) dollar sales market share for a brand, divided by unit volume market share for a brand, plus one.
• E) dollar sales market share for a brand, divided by unit volume market share for a brand, minus the number of competitors against which a brand is being measured.

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Definitions:

Trend

A general direction in which something is developing or changing, often analyzed in data over time.

Net Operating Income

A financial metric that measures a company’s profitability from its core business operations, excluding non-operating income and expenses.

Income Before Taxes

The profit a company generates from its operations before tax obligations are deducted.

Interest

The cost of borrowing money or the return on investment, typically expressed as a percentage of the principal amount.