Entrepreneurship Chapter 2 Quiz

T/F: Entrepreneurs should price their product or service below what it costs to make

false

T/F: The first step in defining your product or service is to make a list of everything you need for your business.

false

T/F: it is not necessary to determine the cost of each individual ingredient or supply.

false

T/F: When pricing your product or service, you should mark up your price at least 2-3 times higher than what it costs to make.

true

T/F: Profit should be prioritized when determining your selling price.

true

T/F: costs for materials and supplies for your business typically increase as your business grows

true

T/F: Market price should not be taken into consideration when determining selling price.

false

T/F: Customers are more likely to pay for a product that is $10 instead of $9.99

false

T/F: Conducting a customer survey is a good way to decide on a selling price.

true

(Economies of scale, fixed expenses, variable expenses, profit margin, price markup, market price, pricing psychology, perceived value)

The amount other businesses are selling similar products or services

market price

(Economies of scale, fixed expenses, variable expenses, profit margin, price markup, market price, pricing psychology, perceived value)

costs that go up or down based on customer volume.

variable expenses

(Economies of scale, fixed expenses, variable expenses, profit margin, price markup, market price, pricing psychology, perceived value)
the feelings a customer has towards a product or service

perceived value

(Economies of scale, fixed expenses, variable expenses, profit margin, price markup, market price, pricing psychology, perceived value)

As a business grows, costs to produce items decrease, which can lead to a larger profit margin.

economies of scale

(Economies of scale, fixed expenses, variable expenses, profit margin, price markup, market price, pricing psychology, perceived value)

The difference between the total cost to run a business and the total revenue the business brings in.

profit margin

(Economies of scale, fixed expenses, variable expenses, profit margin, price markup, market price, pricing psychology, perceived value)

Costs that don’t go up or down with customer volume.

fixed expenses

(Economies of scale, fixed expenses, variable expenses, profit margin, price markup, market price, pricing psychology, perceived value)

Increasing the cost of your product or service to ensure a profit is made

price markup

(Economies of scale, fixed expenses, variable expenses, profit margin, price markup, market price, pricing psychology, perceived value)

The strategy behind pricing conveys a message

pricing psychology

profit margin equation

Profit/Selling price x100

Profit equation for services

Charge for service - variable cost per customer

T/F: When launching your business, you should always have enough inventory to make at least 5 sales

false?

T/F: Colors convey meaning, which can have a significant impact on your brand

true

T/F: Launching your business is the last step in creating your business

false

T/F: Customer communication plays a vital role in the success of a business

true

T/F: The first thing to do when you are ready to launch your business is to purchase the necessary supplies, ingredients, and equipment

false

Psychology of Colors, name the color that corresponds with: inviting

orange

Psychology of Colors, name the color that corresponds with: trustworthiness

blue

Psychology of Colors, name the color that corresponds with: luxury

purple

Psychology of Colors, name the color that corresponds with: wellness

green

Psychology of Colors, name the color that corresponds with: elegance

black

Psychology of Colors, name the color that corresponds with: creativity

purple or orange

Psychology of Colors, name the color that corresponds with: optimism

yellow

Psychology of Colors, name the color that corresponds with: imagination

purple

Psychology of Colors, name the color that corresponds with: calm

blue

Psychology of Colors, name the color that corresponds with: peace

green

Psychology of Colors, name the color that corresponds with: excitement

red

Psychology of Colors, name the color that corresponds with: power

red, black

Psychology of Colors, name the color that corresponds with: dependable

blue

Psychology of Colors, name the color that corresponds with: stillness

gray

Psychology of Colors, name the color that corresponds with: happy

yellow

Psychology of Colors, name the color that corresponds with: reliable

blue

Psychology of Colors, name the color that corresponds with: brigtness

yellow

Psychology of Colors, name the color that corresponds with: action

red