Question

1- The break-even point is the point where:

	A.	incremental revenue equals incremental costs.
	B.	marginal revenue equals marginal cost.
	C.	the slope of the demand curve equals the slope of the cost curve.
	D.	total revenue equals total cost.

2- When the threat of new entrants is low, prices tend to be:

	A.	higher.
	B.	stable.
	C.	lower.
	D.	variable.

3- Costs that do not change with the volume produced are referred to as:

	A.	unavoidable costs.
	B.	totally allocated costs.
	C.	fixed costs.
	D.	total costs.

4- True or False? In target pricing approaches, a firm sets a desired rate of return for the level of delivery of the service, yet it does not consider market demand in any way.

5- True or False? The diagnostic-related group (DRG) system under which hospitals are now paid is based on average historical costs.

6- The more a product or service can be positioned as unique, the greater the likelihood that demand will be:

	A.	elastic.
	B.	fixed.
	C.	high.
	D.	inelastic.

Answer 1

1.The break-even point is the point where total revenue equals total cost means net profit equals to zero.

2. Option C is correct as When the threat of new entrants is low, prices tend to be lower as competetion increases

3. Option C is correct as costs that do not change with the volume produced are referred to as Fixed costs

4. True as in target pricing strategy  an organization sets a price to achieve a desired rate of return

5. True statement as the hospitals are now paid under the diagnostic-related group system, based on average historical costs.

6. Option A is correct as  unique positioning  acn develop the high elasticity towards any product that means the customers are more willing to purchase it .