Question

Question 17

Pricing for one-time-only special orders is, typically

Question 17 options:

1-higher in variable costs than usual.

2-a long-run decision.

3-a short-run decision.

4-a pricing decision using the time horizon.

5-based on fixed costs alone.

Question 19 (1 point)

For long-run pricing decisions, using stable prices has the advantage of

Question 19 options:

1-

reducing competition.

2-

reducing the need to change cost structures frequently.

3-

increasing margins.

4-

helping build buyer-seller relationships.

5-

minimizing the need to monitor competitors prices frequently.

Question 20 (1 point)

Johnson Petroleum Company is considering pricing its 5,000 litre petroleum tanks using either variable manufacturing or full product costs as the base. The variable cost base provides a prospective price of $2,800 and the full cost base provides a prospective price of $2,850. The difference between the two prices is

Question 20 options:

1-	known as peak pricing.
2-	caused by the inability of most companies to estimate fixed cost per unit with any degree of reliability.
3-	known as price discrimination.
4-	due to the fact that the variable cost base must estimate all fixed costs, other variable costs, and desired profit while the full cost base must estimate only desired profit. 5-the amount of profit to be included.

Answer 1

17) Pricing for one-time-only special orders is typically a short run decisions as these orders are unanticipated and pricing decisions are made for only one order in particular. Hence the answer is option (3).

19) Using stable prices in the long run will help in building buyer-seller relationship. If the buyers feel that price of a product is more stable, they will continue to buy the same product and as a result a kind of brand loyalty can be created. So the answer is option (4).