Specialty Cakes Imagine That You're Planning an After-Symphony Fund-Raising Party, and You

question 66

Multiple Choice

Specialty Cakes
Imagine that you're planning an after-symphony fund-raising party, and you need a life-size grand piano cake. Or, you are a developer proposing a new shopping center to a group of investors, and you want to serve a cake shaped like an architectural rendition of the center. Is this impossible? No, you just need to contact Cecilia Villaveces Cakes. She actually built a life-size grand piano for a gala in Macon, Georgia. You can expect to pay anywhere from $75 to $10,000 for one of Cecilia's artistic creations, depending on complexity of design and size. She uses only the best ingredients, and no two cakes are ever quite alike.
-Refer to Specialty Cakes.Although many factors determine the prices charged by Cecilia Villaveces Cakes,the two primary determinants are:

• A) costs of manufacturing and distribution costs.
• B) stage of the product life cycle and costs to the consumers.
• C) the demand for the good and the cost to the seller.
• D) demand by the consumer and perceived quality.
• E) distribution and promotion strategies used by the cake maker.

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Definitions:

Product Demand Elasticity

A measure of how sensitive the quantity demanded of a product is to changes in its price.

Marginal Productivity Theory

An economic theory that explains how the value of a productive input is determined by its contribution to the total output.

Income Distribution

The way in which total income is divided among the members of a society.

Marginal Contribution

The additional amount of revenue or benefit generated by utilizing one more unit of a resource or producing one additional unit of a product.