When Setting a Price Level Policy, a Good Marketing Manager

question 153

Multiple Choice

When setting a price level policy, a good marketing manager knows that:

• A) introductory price dealing usually does not increase sales.
• B) a penetration price makes the most sense when there is a large "elite" market.
• C) a "skimming" price may lead to low profits if demand is very elastic.
• D) it's easy to raise prices if the initial price is too low.
• E) none of the above is true.

---

Definitions:

Product Costing

The process of determining the total cost involved in the production of a product, including material, labor, and overhead expenses.

Actual Costs

The actual costs are the genuine expenditures incurred by a business during production, operation, or other activities, as opposed to estimated or budgeted costs.

Direct Labour Efficiency Variance

The difference between the actual hours worked and the standard hours expected to produce a certain number of units, multiplied by the standard labor rate.

Actual Production

The real and measurable output of goods or services from a production process or system.