There some marketing questions need to figure out. 1 When Pizza Hut ran a sales

Question

There some marketing questions need to figure out.

1 When Pizza Hut ran a sales promotion reducing the price of pizza by 10% it experienced a 40% increase in sales. This demonstrated that the product experienced an elasticity response ofand was price A. 2.5 elastic B. 0.25; inelastic C. 0.25; elastic D. 4; elastic E. 4; inelastic 2. The Apple iPhone 9E is introduced as a new product at an initial price of $800. People wait in line overnig so they can be one of the first to own these unique, but high-priced, phones. Which pricing strategy is Apple using to help recoup its research and development costs and generate quick profit for the phone? A. price lining B. experience curve pricing C. customary pricing D. skim pricing E. target pricing 3. When Hallmark cards introduced a line of $0.99 cards (about half the price of the previously least expensi cards sold by Hallmark), the greeting card company was trying to appeal to a mass market that was price pricing strategy. sensitive. Hallmark was using a A. prestige B. skimming C. penetration D. demand-backward E. experience-curve

Explanation / Answer

1) D is correct

elasticity= %change in quantity demanded / %change in price

= 40/10= 4

Since it is greater than 1, demand is price elastic.

2. D is correct

Under skim pricing good is initially sold at higher price and then price is reduced.

3. C is correct

Under penetration pricing price is initially set low to attract wider range of customers.

4. B is correct

Under prestige pricing goods are sold at higher price to make it look of good quality.

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