Price Lining Refers to

question 119

Multiple Choice

Price lining refers to

• A) charging different prices to different buyers for goods of like grade and quality.
• B) setting a low initial price on a new product to appeal immediately to the mass market.
• C) setting a market price for product or product class based on a subjective feel for the competitors' price or market price.
• D) setting prices a few dollars or cents under an even number.
• E) setting the price of a line of products at a number of different specific price points.

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Definitions:

Controllable Margin

A financial metric that represents the amount of profit or contribution margin that management can directly influence through its decisions.

Operating Assets

Assets that a business uses for its day-to-day operational activities to generate revenue, excluding investment and non-operational assets.

Return on Investment

A financial ratio that calculates the profitability of an investment by dividing the net profit by the initial cost of the investment.

Controllable Margin

The portion of profit or income that a manager can directly influence by controlling costs or increasing sales.