Price and Pricing Policy (MGTC3218)
Higher Institute of Commerce and Management (HICM)
Semester: Second Semester
Level: 300
Year: 2015
REPUBLIC OF CAMEROON REPUBLIQUE DU CAMEROUN
Peace-Work-Fatherland Paix-Travail Patrie
THE UNIVERSITY OF BAMENDA MARKETING DEPARTMENT
HIGHER INSTITUTE OF COMMERCE AND MANAGEMENT
MKTC 210: PRICING POLICY TEST FOR 2015 June 28, 2015 lH40mn Proposed by Tiambou
ApoIlin
1) Why are pricing decisions so important to an organization? (.3 marks)
2) Compare and contrast price and non price competition. Describe the conditions under which each
form works best. (6 marks)
3) Why must marketing objectives-a nd pricing objectives; be considered when making pricing
decisions? (4 marks)
4) What are the major methods used for transfer-pricing? (4 marks)
5) Write short note on price fixing and price discrimination. (3 marks)
6) Exercise: The firm's supply in the perfect competition.
Two firms A and B are producing the same good Q and supply it in a perfect competition's market. The
price P = 8 and T
CA
=15Q-6Q+Q is the firm's A total cost curve in the short run. And T
CB
=4Q+Q-3Q is
the firm's B total cost curve in the short run.
Question 1: In case the firms A and B are rational what is the profit realized by each firm? (5 marks)
Question 2: From which values of P, firms A arid B will be eliminated to supply the good Q in the
market? ( 5 MARK)
SECTION B (9 MARKS)
EXERCISE
TWO:
A
CCOUNTING
M
ETHOD
O
F PRICE DETERMINATION
Euro Voyage is a travel agency located in Mankon. The enterprise is specialized in trading plane tickets
for Douala- Francfurt on BRUSSELS Airlines. The return ticket is 1,000,000 CFAF, Euro Voyage earns 9
% as commission on the fare. The structural costs amount to 20,000,000 CFAF per month, and its
variable charges are 40,000 CFAF per ticket. These variable charges include 16,000 CFAF for the
shipment, fees to the customer by DHL per ticket. We assume all the customers are purchasing return
ticket.
Work required:
a) How many tickets must sell Euro Voyage per month in order to cover up its operating expenses?
(2marks)
b) How many tickets must sell Euro Voyage per month in order to perform an operating result of
10,000 000 CFAF? (3.5marks)
c) Euro Voyage is offered by DHL a discount of 5,000 CFAF per ticket. How much will it value its
tickets while maintaining its operating result at 10,000,000 CFAF? (The number of tickets sold is the
same as question b). (3.5marks)
Good luck
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