Question 1

Which of the following best defines markup pricing?

Accepted Answer

A)  The cost of buying the product from the producer,plus amounts for profit and for expenses not otherwise accounted for 
B)  The practice of marking up prices by 100 percent,or doubling the cost 
C)  A method of determining what sales volume must be reached before total revenue equals total costs 
D)  The ability to change prices very quickly,often in real time 
A)  The cost of buying the product from the producer,plus amounts for profit and for expenses not otherwise accounted for 
B)  The practice of marking up prices by 100 percent,or doubling the cost 
C)  A method of determining what sales volume must be reached before total revenue equals total costs 
D)  The ability to change prices very quickly,often in real time

Question 2

To prove predatory pricing,it must be proved that the destructive company explicitly tried to ruin a competitor and that the predatory price was below the predator's average variable cost.

Accepted Answer

A) True 
 B)False

Question 3

As products enter the growth stage of the product life cycle,prices generally begin to stabilize.

Accepted Answer

A) True 
 B)False

Question 4

As the product enters the maturity stage,prices generally begin to stabilize.

Accepted Answer

A) True 
 B)False

Question 5

Because of its recent high growth in the national market,Mable Inc.,an online cosmetics retailer,has divided its U.S.market into segments and is charging a flat freight rate to all customers in a given segment.In this scenario,Mable Inc.plans to adopt freight absorption pricing.

Accepted Answer

A) True 
 B)False

Question 6

When using _____,the seller pays all or part of the actual shipment charges and does not pass them on to the buyer.

Accepted Answer

A)  FOB origin pricing 
B)  freight absorption pricing 
C)  uniform delivered pricing 
D)  basing-point pricing 
A)  FOB origin pricing 
B)  freight absorption pricing 
C)  uniform delivered pricing 
D)  basing-point pricing

Question 7

For convenience,pricing objectives can be divided into three categories: profit oriented,sales oriented,and ______.

Accepted Answer

A)  marketing oriented 
B)  status quo 
C)  inventory oriented 
D)  tax oriented 
A)  marketing oriented 
B)  status quo 
C)  inventory oriented 
D)  tax oriented

Question 8

When Lofonift Inc.introduced its flagship MP3 player,it captured the market by offering the product at a very low price.This gradually forced many of its competitors out of business.Once its competitors were out of business,Lofonift Inc.raised the price.In this scenario,Lofonift Inc.most likely indulged in _____.

Accepted Answer

A)  predatory pricing 
B)  price discrimination 
C)  status quo pricing 
D)  price fixing 
A)  predatory pricing 
B)  price discrimination 
C)  status quo pricing 
D)  price fixing

Question 9

Define elasticity of demand and discuss the factors that affect elasticity.

Accepted Answer

Answers will vary.Elasticity of demand r

Question 10

Which of the following defines demand?

Accepted Answer

A)  The quantity of a product offered to the market by a supplier at various prices for a specified period 
B)  The quantity of a product sold in the market at various prices for a specified period 
C)  A company's product sales as a percentage of total sales for that industry 
D)  A part of profit percentage that is given up in exchange for acquiring a good or service 
A)  The quantity of a product offered to the market by a supplier at various prices for a specified period 
B)  The quantity of a product sold in the market at various prices for a specified period 
C)  A company's product sales as a percentage of total sales for that industry 
D)  A part of profit percentage that is given up in exchange for acquiring a good or service

Question 11

Extranets enable buyers to quickly and easily compare products and prices,putting them in a better bargaining position.

Accepted Answer

A) True 
 B)False

Question 12

Discuss the role of price in promotion strategies for products.

Accepted Answer

Answers will vary.Price is often used as

Question 13

Which action would a firm take if following a status quo pricing policy?

Accepted Answer

A)  Charge a price identical to or very close to the competition's price. 
B)  Discourage or block competition from entering a market. 
C)  Enable management to recover its product development costs quickly. 
D)  Expand production with the use of technological innovations and tools. 
A)  Charge a price identical to or very close to the competition's price. 
B)  Discourage or block competition from entering a market. 
C)  Enable management to recover its product development costs quickly. 
D)  Expand production with the use of technological innovations and tools.

Question 14

Betty's Bakery sells cupcakes to coffee shops and restaurants.The company strives to increase its market share in terms of the revenue generated.This illustrates the _____ pricing objective.

Accepted Answer

A)  status quo 
B)  profit-oriented 
C)  bait 
D)  sales-oriented 
A)  status quo 
B)  profit-oriented 
C)  bait 
D)  sales-oriented

Question 15

Which term refers to a deduction from list price applied to a customer's total purchases made during a specific period?

Accepted Answer

A)  Cumulative quantity discount 
B)  Noncumulative quantity discount 
C)  Cash discount 
D)  Quantity discount 
A)  Cumulative quantity discount 
B)  Noncumulative quantity discount 
C)  Cash discount 
D)  Quantity discount

Question 16

Product life cycles can only be measured in years.

Accepted Answer

A) True 
 B)False

Question 17

A situation in which consumer response is sensitive to changes in price exhibits ______ demand.

Accepted Answer

A)  elastic 
B)  inelastic 
C)  stagnant 
D)  fluctuating 
A)  elastic 
B)  inelastic 
C)  stagnant 
D)  fluctuating

Question 18

Which statement is true of the relationship of price to quality?

Accepted Answer

A)  When a purchase decision involves uncertainty,consumers tend to attribute higher quality to low-priced products. 
B)  Consumers perception that a higher price indicates higher quality seems to vary from one product to another. 
C)  In the absence of other information,people typically assume that if prices are higher,that rarely indicates higher quality. 
D)  Price promotions of higher priced,higher quality brands tend to attract more business than do similar promotions of lower priced and lower quality brands. 
A)  When a purchase decision involves uncertainty,consumers tend to attribute higher quality to low-priced products. 
B)  Consumers perception that a higher price indicates higher quality seems to vary from one product to another. 
C)  In the absence of other information,people typically assume that if prices are higher,that rarely indicates higher quality. 
D)  Price promotions of higher priced,higher quality brands tend to attract more business than do similar promotions of lower priced and lower quality brands.

Question 19

Unlike break-even pricing,markup pricing uses complicated concepts of cost.

Accepted Answer

A) True 
 B)False

Question 20

The newly opened Stone Restaurant was unable to attract a lot of customers.Because the restaurant's owner had to pay back the loan that he had taken to start the restaurant,he decided to offer a 20 percent discount on the entire menu on weekends.In this scenario,the owner's pricing objective is to maximize _____.

Accepted Answer

A)  market share 
B)  profit 
C)  asset 
D)  sales 
A)  market share 
B)  profit 
C)  asset 
D)  sales

Which of the following best defines markup pricing?

To prove predatory pricing,it must be proved that the destructive company explicitly tried to ruin a competitor and that the predatory price was below the predator's average variable cost.

As products enter the growth stage of the product life cycle,prices generally begin to stabilize.

As the product enters the maturity stage,prices generally begin to stabilize.

Because of its recent high growth in the national market,Mable Inc.,an online cosmetics retailer,has divided its U.S.market into segments and is charging a flat freight rate to all customers in a given segment.In this scenario,Mable Inc.plans to adopt freight absorption pricing.

When using _____,the seller pays all or part of the actual shipment charges and does not pass them on to the buyer.

For convenience,pricing objectives can be divided into three categories: profit oriented,sales oriented,and ______.

Define elasticity of demand and discuss the factors that affect elasticity.

Which of the following defines demand?

Extranets enable buyers to quickly and easily compare products and prices,putting them in a better bargaining position.

Discuss the role of price in promotion strategies for products.

Which action would a firm take if following a status quo pricing policy?

Betty's Bakery sells cupcakes to coffee shops and restaurants.The company strives to increase its market share in terms of the revenue generated.This illustrates the _____ pricing objective.

Which term refers to a deduction from list price applied to a customer's total purchases made during a specific period?

Product life cycles can only be measured in years.

A situation in which consumer response is sensitive to changes in price exhibits ______ demand.

Which statement is true of the relationship of price to quality?

Unlike break-even pricing,markup pricing uses complicated concepts of cost.

An Overview of Marketing

Strategic Planning and Competitive Advantage

Ethics and Social Responsibility

The Marketing Environment

Developing a Global Vision

Consumer Decision Making

Business Marketing

Segmenting and Targeting Markets

Marketing Research

Product Concepts

Developing and Managing Products

Services and Nonprofit Organization Marketing

Supply Chain Management and Marketing Channels

Retailing

Marketing Communications

Advertising,public Relations,and Sales Promotion

Personal Selling and Sales Management

Social Media and Marketing

Filters

Exam 19: Pricing Concepts

Which of the following best defines markup pricing?

To prove predatory pricing,it must be proved that the destructive company explicitly tried to ruin a competitor and that the predatory price was below the predator's average variable cost.

As products enter the growth stage of the product life cycle,prices generally begin to stabilize.

As the product enters the maturity stage,prices generally begin to stabilize.

Because of its recent high growth in the national market,Mable Inc.,an online cosmetics retailer,has divided its U.S.market into segments and is charging a flat freight rate to all customers in a given segment.In this scenario,Mable Inc.plans to adopt freight absorption pricing.

When using _____,the seller pays all or part of the actual shipment charges and does not pass them on to the buyer.

For convenience,pricing objectives can be divided into three categories: profit oriented,sales oriented,and ______.

Define elasticity of demand and discuss the factors that affect elasticity.

Which of the following defines demand?

Extranets enable buyers to quickly and easily compare products and prices,putting them in a better bargaining position.

Discuss the role of price in promotion strategies for products.

Which action would a firm take if following a status quo pricing policy?

Betty's Bakery sells cupcakes to coffee shops and restaurants.The company strives to increase its market share in terms of the revenue generated.This illustrates the _____ pricing objective.

Which term refers to a deduction from list price applied to a customer's total purchases made during a specific period?

Product life cycles can only be measured in years.

A situation in which consumer response is sensitive to changes in price exhibits ______ demand.

Which statement is true of the relationship of price to quality?

Unlike break-even pricing,markup pricing uses complicated concepts of cost.

An Overview of Marketing

Strategic Planning and Competitive Advantage

Ethics and Social Responsibility

The Marketing Environment

Developing a Global Vision

Consumer Decision Making

Business Marketing

Segmenting and Targeting Markets

Marketing Research

Product Concepts

Developing and Managing Products

Services and Nonprofit Organization Marketing

Supply Chain Management and Marketing Channels

Retailing

Marketing Communications

Advertising,public Relations,and Sales Promotion

Personal Selling and Sales Management

Social Media and Marketing

Filters