Using Variable Pricing in Response to Demand Variability Tomaximize Revenue

question 40

Multiple Choice

Using variable pricing in response to demand variability tomaximize revenue using perishablecapacity is known as

• A)yield management.
• B)profit minimization.
• C)capacity loading.
• D)demand optimization.
• E)perishability avoidance.

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Definitions:

Marginal Cost

The augmentation in complete expenditure resulting from the manufacture of one more unit of a good or service.

Economies Of Scale

The cost advantages that enterprises obtain due to scale of operation, with cost per unit of output generally decreasing with increasing scale.

Law Of Diminishing Returns

An economic principle stating that adding more of one factor of production, while holding others constant, will at a certain point yield lower incremental per-unit returns.

Economies Of Scale

The financial benefits that businesses achieve because of their size of operation, generally seeing a reduction in cost per unit of output as the scale expands.