Question : 41.The amount of value a firm creates measured by: A. the difference : 1299415

41.The amount of value a firm creates is measured by: 

A. the difference between the previous year’s profitability and the current year’s profitability.

B. dividing the market price of its products by the price that customers are actually willing to pay.

C. the difference between its costs of production and the value that consumers perceive in its products.

D. dividing the net profits of the firm by total invested capital.

E. the sum of the profitability of the last two fiscal years.

42.In general, the more value customers place on a firm’s products: 

A. the lesser the profitability of the firm.

B. the higher the competitive pressure from other firms.

C. the lesser the quality of the product.

D. the lesser the consumer surplus for those products.

E. the higher the price the firm can charge for those products.

43.Typically, the price a firm charges for a good or service is: 

A. less than the value placed on that good or service by the customer.

B. more than what customers assume it would be.

C. more than the market price for similar goods or services.

D. the same as the value placed on that good or service by the customer.

E. less than the lowest priced similar good or service in the market.

44.The price a firm charges for a good or service is typically less than the value placed on that good or service by the customer. This is because the consumer captures some of that value in the form of what economists call a _____. 

A. firm value

B. consumer surplus

C. customer loyalty

D. firm deficit

E. profit growth

45.As a result of consumer surplus, a firm typically charges less price for a good or service than the value placed on it by customers because: 

A. the value creation results in a corresponding reduction in costs of production.

B. it is highly unlikely that the same good or service will be available to the customers from other firms.

C. the firm is competing with other firms for the customer’s business.

D. the firm charges a price that reveals a consumer’s assessment of the product’s value.

E. the firm creates value for the customer by producing a wide range of products

46.One of the reasons why a firm typically charges for a good or service less than the value placed on that good or service by the customer is because: 

A. the firm attempts to create value for the consumers by providing them a wide range of products

B. it is normally impossible to segment a market based on each customer’s reservation price.

C. the value creation results in a corresponding reduction in costs of production.

D. the firm frequently modifies its products to compete with the products introduced by other firms.

E. it is highly unlikely that the same good or service will be available to the customers from other firms.

47.The price that reflects an individual’s assessment of the value of a product is referred to as: 

A. the market price.

B. the customer’s negotiated price.

C. the base value of the product.

D. the customer’s reservation price.

E. the profit growth price.

48.The value of a product to an average consumer is V, the average price that the firm can charge a consumer for that product is P, and the average unit cost of producing that product is C. For this scenario, which of the following is true? 

A. The firm makes a profit so long as C is greater than P.

B. The higher C is relative to P, greater will be the profit.

C. The consumer surplus per unit is equal to V – P.

D. The higher the intensity of competitive pressure, the higher the price charged relative to V.

E. The lower the consumer surplus the greater the value for the money the consumer gets.

49.The _____ of a firm is measured by the difference between the value of a product to an average consumer and the average unit cost of producing that product. 

A. customer surplus

B. value creation

C. cost curve

D. value efficiency

E. customer reservation

50.A company can create more value for a product by: 

A. charging a higher price for the product.

B. raising production costs.

C. generating more profits.

D. making the product more attractive.

E. increasing the profitability of the product.