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:

Manufacturing Overhead

Represents the indirect factory-related costs incurred when manufacturing a product or providing a service, which cannot be directly tied to a specific product unit.

Designing Products

The process of ideating, creating specifications, and developing prototypes for new products.

Activity Cost Pool

A collection of all costs associated with a particular activity or process, enabling more accurate allocation of overhead costs to products or services.

Product Design Hour

Product design hour refers to the time spent on the creation and planning of new products, from conceptualization to final design.