take top-down decisions without consulting employees to find out their views. they may provide very little information on the reasons for the decision
behave rather as a parent might in making family decisions. They consult at every level and explain their reasons, but take the final decision themselves.
guide rather than dictate, consulting widely and encouraging everyone to participate in the decision making process.
7. What is meant by psychological Pricing
This occurs when different prices are charged for the same good or service
For example selling a product at £49.99 instead of £50 makes customers think of it as less than £50
This is the method of pricing which considers the toal cost per unit and then adds on a percentage to arrive at a final price.
8. Which one of these is an example of a variable cost
employees salary
Raw materials
Rent
9. What is meant by Price Discrimination
This occurs when different prices are charged for the same good or service
For example selling a product at £49.99 instead of £50 makes customers think of it as less than £50
This occurs when different prices are charged for the same good or service
10. Define A theory Y Manager
Love employees and give them bonuses for working hard
assume that human beings want to work and will commit themselves to work effectively without strict controls. They will engage with the objectives of the organisation, accept responsibility and use their initiative to help solve problems
assume their employees are lazy and prefer to be given firm direction with strict controls> Managers will adopt to a stick and carrot approach to make them work hard. This may involve targets with heavy penalties if they are not met.
11. Define what is meant by Competitive Pricing
this strategy uses a low price to enter the market & gain market share
Some firms set their prices the same as their competitors
This occurs when a firm sets out to destroy (or weaken) the competition through low prices
12. Which one of these is a non profit motive for becoming an entrepreneur
Being self satisfied
making profit
getting respect
13. Define what is meant by Price Skimming
this strategy uses a high price to enter the market. Even though the price is high, some people may still be eager to try a new product once sales from the group of people disappear the price of the product can decrease to attract new customers.
this strategy uses a low price to enter the market & gain market share
Some firms set their prices the same as their competitors
14. A cost that change with the level of output
Variable Costs
Fixed Costs
Overheads
Expenditure
15. A cost that does change with output
Fixed Cost
Variable Costs
Total Costs
Overheads
16. What is a margin of safety
the amount by which sales can fall from their current level before reaching the break-even point
A margin used to keep profit safe
where sales can increase from their current level
17. What is break even
when total costs are higher than total total revenue
when total revenue is equal to total costs
when total revenue is higher than total costs
18. the formula for contribution per unit
Variable cost x fixed costs + profit
Fixed Costs ÷ (selling price per unit- variable cost per unit)
selling price per unit- variable cost per unit
19. Which one of these is a benefit of the break-even analysis?
analysis does take into account economies of scale
this is a very easy way of showing how profit levels change with changes in output
analysis assumes that all output is sold
20. What is meant by Predator Pricing
This is the method of pricing which considers the toal cost per unit and then adds on a percentage to arrive at a final price.
This occurs when a firm sets out to destroy (or weaken) the competition through low prices
This occurs when a firm sets out to destroy (or weaken) the competition through low prices
