Market Analysts for a Large Cereal Company Estimated That Price

question 151

Multiple Choice

Market analysts for a large cereal company estimated that price elasticity of demand for pre-sweetened cereal is 1.97, but that the entire market for ready-to-eat cereals exhibits price elasticity of demand of 0.36. Most likely, this information will be collected by managers in which step of the price-setting process?

• A)estimating the break-even point
• B)identifying pricing constraints and objectives
• C)estimating demand and revenue
• D)selecting an appropriate (approximate)price level

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Definitions:

Journal Entry

A Journal Entry is a record in bookkeeping that logs the debit and credit parts of a financial transaction in accounting.

Credits

Entries that increase liabilities or equity accounts, or decrease asset or expense accounts in accounting.

Wages Payable

An account that records the amounts owed to employees for work that has been performed but has not yet been paid.

Wages Expense

The total cost incurred by a company for paying hourly-based employee salaries.