The Following Is a List of Annual Advertising Expenses (In

question 23

Multiple Choice

The following is a list of annual advertising expenses (in dollars) for a group of states' mental health centers. $\begin{array} { c c c c } \hline 1500 & 11,000 & 7500 & 800 \\600 & 2350 & 3000 & 3800 \\500 & 6000 & 8000 & 500 \\1750 & 1250 & 50 & 3400 \\9000 & 890 & 1600 & 2200 \\\hline\end{array}$
-The lowest advertising expense in the previous set was $50.Would you consider that expense

• A)a klinker
• B)an outlier
• C)neither because it falls well within three standard deviations of the mean

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Definitions:

Fixed Costs

Expenses that do not change with the volume of production or sales, such as rent, salaries, and insurance premiums.

Competitive Pricing

Strategy that tries to reduce the emphasis on price competition by matching other companies’ prices and concentrating their own marketing efforts on the product, distribution, and promotional elements of the marketing mix.

Skimming Pricing

A pricing strategy that involves setting high prices initially and then gradually lowering them over time.

Penetration Pricing

A pricing strategy where a product is introduced to the market at a very low price to attract customers rapidly.