Question 1

________ refers to a measure of the sensitivity of demand to changes in price.

Accepted Answer

A)  Price elasticity 
B)  A demand curve 
C)  Price-value equation 
D)  Marginal utility 
E)  Income elasticity of demand 
A)  Price elasticity 
B)  A demand curve 
C)  Price-value equation 
D)  Marginal utility 
E)  Income elasticity of demand

Question 2

Value-based pricing uses the sellers' perception of value as the key to pricing.

Accepted Answer

A) True 
 B)False

Question 3

What is a pure monopoly?

Accepted Answer

In a pure monopoly, the market is domina

Question 4

As production moves up, the average cost per unit decreases because ________.

Accepted Answer

A)  variable costs decrease 
B)  of increasing diseconomies of scale 
C)  fixed costs are spread over more units 
D)  overhead costs decrease 
E)  revenue increases 
A)  variable costs decrease 
B)  of increasing diseconomies of scale 
C)  fixed costs are spread over more units 
D)  overhead costs decrease 
E)  revenue increases

Question 5

Cost-plus pricing ________.

Accepted Answer

A)  is a complex pricing method 
B)  involves pricing that accurately reflects production costs 
C)  involves adding a standard markup for profit 
D)  aims at breaking even on the costs of making and marketing a product 
E)  is a value-based pricing method 
A)  is a complex pricing method 
B)  involves pricing that accurately reflects production costs 
C)  involves adding a standard markup for profit 
D)  aims at breaking even on the costs of making and marketing a product 
E)  is a value-based pricing method

Question 6

Which of the following is true with regard to price?

Accepted Answer

A)  Historically, price has had the least perceptible impact on buyer choice. 
B)  Price is the least flexible element in the marketing mix. 
C)  Unlike product features and channel commitments, prices cannot be changed quickly. 
D)  Price is the sum of all the values that customers give up to gain the benefits of having a product. 
E)  Prices only have an indirect impact on a firm's bottom line. 
A)  Historically, price has had the least perceptible impact on buyer choice. 
B)  Price is the least flexible element in the marketing mix. 
C)  Unlike product features and channel commitments, prices cannot be changed quickly. 
D)  Price is the sum of all the values that customers give up to gain the benefits of having a product. 
E)  Prices only have an indirect impact on a firm's bottom line.

Question 7

When McDonald's and other fast food restaurants offer "value menu" items at surprisingly low prices, they are most likely using ________ pricing.

Accepted Answer

A)  break-even 
B)  target profit 
C)  good-value 
D)  cost-plus 
E)  target return 
A)  break-even 
B)  target profit 
C)  good-value 
D)  cost-plus 
E)  target return

Question 8

Target return pricing is a variation of which of the following cost-oriented pricing approaches?

Accepted Answer

A)  cost-plus pricing 
B)  break-even pricing 
C)  markup pricing 
D)  value-based pricing 
E)  fixed cost pricing 
A)  cost-plus pricing 
B)  break-even pricing 
C)  markup pricing 
D)  value-based pricing 
E)  fixed cost pricing

Question 9

Which of the following is an external factor that affects pricing decisions in a company?

Accepted Answer

A)  the company's overall marketing strategy 
B)  the nature of the market 
C)  the organizational objectives of the company 
D)  elements of the company's marketing mix 
E)  the annual advertising budget of rival firms 
A)  the company's overall marketing strategy 
B)  the nature of the market 
C)  the organizational objectives of the company 
D)  elements of the company's marketing mix 
E)  the annual advertising budget of rival firms

Question 10

Compare and contrast pure competition and oligopolistic competition.

Accepted Answer

Under pure competition, the market consi

Question 11

A demand curve shows the number of units the market will buy in a given time period at different prices that could be charged.

Accepted Answer

A) True 
 B)False

Question 12

Define price. Discuss its importance.

Accepted Answer

In the narrowest sense, price is the amo

Question 13

Refer to the scenario below to answer the following question(s).
Alden Manufacturing produces small kitchen appliances-blenders, hand mixers, and electric skillets-under the brand name First Generation. Alden attempts to target newlyweds and first-time home buyers with this brand.
Considering that most young households have limited financial resources, Alden attempts to engage in target costing. "In doing this," says Milt Alden, the co-founder of Alden Electronics, "we have better control over keeping price right in line with customers."
Alden manufactures a three-speed blender, its top seller, along with a five-speed blender. The hand mixers are manufactured in two variants-a small handheld mixer with two rotating beaters and another that comes with an optional stand and an attached mixing bowl. Alden's temperature-controlled skillets are manufactured in a single style with three color options.
"Our product offerings are narrower," Milt Alden added, "but our line workers know each product like the back of their hands. This allows us to produce superior products while holding our prices low.
-If Milt Alden focuses on overall costs of manufacturing plus profit in setting product prices, which strategy would he employ?

Accepted Answer

A)  break-even pricing 
B)  competition-based pricing 
C)  value-added pricing 
D)  cost-plus pricing 
E)  good-value pricing 
A)  break-even pricing 
B)  competition-based pricing 
C)  value-added pricing 
D)  cost-plus pricing 
E)  good-value pricing

Question 14

________ involves setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk.

Accepted Answer

A)  Value-based pricing 
B)  Competition-based pricing 
C)  Cost-based pricing 
D)  Penetration pricing 
E)  Break-even pricing 
A)  Value-based pricing 
B)  Competition-based pricing 
C)  Cost-based pricing 
D)  Penetration pricing 
E)  Break-even pricing

Question 15

The total production costs at Kellner Machine Works are $87,000 out of which $45,000 represent fixed costs. Which of the following is representative of the variable costs incurred by the company?

Accepted Answer

A)  $35,000 
B)  $42,000 
C)  $45,000 
D)  $87,000 
E)  $132,000 
A)  $35,000 
B)  $42,000 
C)  $45,000 
D)  $87,000 
E)  $132,000

Question 16

Department stores such as Kohl's and Macy's practice high-low pricing by ________.

Accepted Answer

A)  charging a constant, everyday low price 
B)  providing few or no temporary price discounts 
C)  increasing prices temporarily on select products 
D)  having frequent sale days for store credit-card holders 
E)  underpricing most consumer items 
A)  charging a constant, everyday low price 
B)  providing few or no temporary price discounts 
C)  increasing prices temporarily on select products 
D)  having frequent sale days for store credit-card holders 
E)  underpricing most consumer items

Question 17

Prices have a direct impact on a firm's bottom line.

Accepted Answer

A) True 
 B)False

Question 18

If demand hardly changes with a small change in price, the demand is ________.

Accepted Answer

A)  variable 
B)  inelastic 
C)  highly elastic 
D)  derived 
E)  negative 
A)  variable 
B)  inelastic 
C)  highly elastic 
D)  derived 
E)  negative

Question 19

Average cost tends to increase with accumulated production experience.

Accepted Answer

A) True 
 B)False

Question 20

Azure Air, an airline company, offers attractive prices to customers with tighter budgets. A no-frills airline, it charges for all other additional services, such as baggage handling and in-flight refreshments. Which of the following best describes Azure Air's pricing method?

Accepted Answer

A)  target profit pricing 
B)  good-value pricing 
C)  cost-based pricing 
D)  break-even pricing 
E)  penetration pricing 
A)  target profit pricing 
B)  good-value pricing 
C)  cost-based pricing 
D)  break-even pricing 
E)  penetration pricing

________ refers to a measure of the sensitivity of demand to changes in price.

Value-based pricing uses the sellers' perception of value as the key to pricing.

What is a pure monopoly?

As production moves up, the average cost per unit decreases because ________.

Cost-plus pricing ________.

Which of the following is true with regard to price?

When McDonald's and other fast food restaurants offer "value menu" items at surprisingly low prices, they are most likely using ________ pricing.

Target return pricing is a variation of which of the following cost-oriented pricing approaches?

Which of the following is an external factor that affects pricing decisions in a company?

Compare and contrast pure competition and oligopolistic competition.

A demand curve shows the number of units the market will buy in a given time period at different prices that could be charged.

Define price. Discuss its importance.

________ involves setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk.

The total production costs at Kellner Machine Works are $87,000 out of which $45,000 represent fixed costs. Which of the following is representative of the variable costs incurred by the company?

Department stores such as Kohl's and Macy's practice high-low pricing by ________.

Prices have a direct impact on a firm's bottom line.

If demand hardly changes with a small change in price, the demand is ________.

Average cost tends to increase with accumulated production experience.

Azure Air, an airline company, offers attractive prices to customers with tighter budgets. A no-frills airline, it charges for all other additional services, such as baggage handling and in-flight refreshments. Which of the following best describes Azure Air's pricing method?

Marketing: Creating Customer Value and Engagement

Company and Marketing Strategy: Partnering to Build Customer Relationships

Analyzing the Marketing Environment

Managing Marketing Information to Gain Customer Insights

Consumer Markets and Buyer Behavior

Business Markets and Business Buyer Behavior

Customer-Driven Marketing Strategy: Creating Value for Target Customers

Products, Services, and Brands: Building Customer Value

New Product Development and Product Life-Cycle Strategies

Pricing Strategies: Additional Considerations

Marketing Channels: Delivering Customer Value

Retailing and Wholesaling

Engaging Customers and Communicating Customer Value: Integrated Marketing Communications Strategy

Advertising and Public Relations

Personal Selling and Sales Promotion

Direct, Online, Social Media, and Mobile Marketing

Creating Competitive Advantage

The Global Marketplace

Sustainable Marketing: Social Responsibility and Ethics

Filters

Exam 10: Pricing: Understanding and Capturing Customer Value

________ refers to a measure of the sensitivity of demand to changes in price.

Value-based pricing uses the sellers' perception of value as the key to pricing.

What is a pure monopoly?

As production moves up, the average cost per unit decreases because ________.

Cost-plus pricing ________.

Which of the following is true with regard to price?

When McDonald's and other fast food restaurants offer "value menu" items at surprisingly low prices, they are most likely using ________ pricing.

Target return pricing is a variation of which of the following cost-oriented pricing approaches?

Which of the following is an external factor that affects pricing decisions in a company?

Compare and contrast pure competition and oligopolistic competition.

A demand curve shows the number of units the market will buy in a given time period at different prices that could be charged.

Define price. Discuss its importance.

________ involves setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk.

The total production costs at Kellner Machine Works are $87,000 out of which $45,000 represent fixed costs. Which of the following is representative of the variable costs incurred by the company?

Department stores such as Kohl's and Macy's practice high-low pricing by ________.

Prices have a direct impact on a firm's bottom line.

If demand hardly changes with a small change in price, the demand is ________.

Average cost tends to increase with accumulated production experience.

Azure Air, an airline company, offers attractive prices to customers with tighter budgets. A no-frills airline, it charges for all other additional services, such as baggage handling and in-flight refreshments. Which of the following best describes Azure Air's pricing method?

Marketing: Creating Customer Value and Engagement

Company and Marketing Strategy: Partnering to Build Customer Relationships

Analyzing the Marketing Environment

Managing Marketing Information to Gain Customer Insights

Consumer Markets and Buyer Behavior

Business Markets and Business Buyer Behavior

Customer-Driven Marketing Strategy: Creating Value for Target Customers

Products, Services, and Brands: Building Customer Value

New Product Development and Product Life-Cycle Strategies

Pricing Strategies: Additional Considerations

Marketing Channels: Delivering Customer Value

Retailing and Wholesaling

Engaging Customers and Communicating Customer Value: Integrated Marketing Communications Strategy

Advertising and Public Relations

Personal Selling and Sales Promotion

Direct, Online, Social Media, and Mobile Marketing

Creating Competitive Advantage

The Global Marketplace

Sustainable Marketing: Social Responsibility and Ethics

Filters