Question 1

For the sake of simplicity and by convention, price elasticity figures are shown as

Accepted Answer

A)  positive numbers (0.64, 1.25, etc.). 
B)  negative numbers (−0.64, −1.25, etc.). 
C)  Greek letters (∑, ∏, etc.). 
D)  Roman numerals (I, V, X, etc.). 
E)  English consonants (P, Q, R, etc.). 
A)  positive numbers (0.64, 1.25, etc.). 
B)  negative numbers (−0.64, −1.25, etc.). 
C)  Greek letters (∑, ∏, etc.). 
D)  Roman numerals (I, V, X, etc.). 
E)  English consonants (P, Q, R, etc.). A

Question 2

Price elasticity of demand is determined by a number of factors, such as the availability of substitutes, the necessity of the product or service, and

Accepted Answer

A)  the cash outlay of the purchase relative to a person's disposable income. 
B)  the stage of the product or service in its product life cycle. 
C)  the degree of carrying costs for the manufacturer or distributor. 
D)  the financial resources of the organization itself. 
E)  the ability of the organization to meet sudden increases in demand. 
A)  the cash outlay of the purchase relative to a person's disposable income. 
B)  the stage of the product or service in its product life cycle. 
C)  the degree of carrying costs for the manufacturer or distributor. 
D)  the financial resources of the organization itself. 
E)  the ability of the organization to meet sudden increases in demand. A

Question 3

A graphic presentation of the break-even analysis that shows the intersection of total revenue and total cost to identify profit or loss for a given quantity sold is referred to as

Accepted Answer

A)  a Gantt chart. 
B)  a demand curve. 
C)  an ROI analysis. 
D)  a cross-tabulation. 
E)  a break-even chart. 
A)  a Gantt chart. 
B)  a demand curve. 
C)  an ROI analysis. 
D)  a cross-tabulation. 
E)  a break-even chart. E

Question 4

Which of these would be an example of a fixed cost for a company that makes carbon monoxide monitoring systems for workers to wear in hazardous areas?

Accepted Answer

A)  the lithium batteries that are used in each monitor 
B)  the chest harness used to wear the monitor 
C)  the insurance for the company's factory 
D)  the free training videos that are sent to each new customer 
E)  the stainless-steel, water-resistant cases in which the monitors are stored 
A)  the lithium batteries that are used in each monitor 
B)  the chest harness used to wear the monitor 
C)  the insurance for the company's factory 
D)  the free training videos that are sent to each new customer 
E)  the stainless-steel, water-resistant cases in which the monitors are stored

Question 5

Figure 13-7B
-In the break-even chart in Figure 13-7 above, the rectangular area EBCD represents the firm's

Accepted Answer

A)  fixed costs. 
B)  break-even point. 
C)  variable costs. 
D)  profit. 
E)  total revenue. 
A)  fixed costs. 
B)  break-even point. 
C)  variable costs. 
D)  profit. 
E)  total revenue.

Question 6

Specifying the role of price in an organization's marketing and strategic plans is referred to as

Accepted Answer

A)  choosing a pricing plan. 
B)  defining a profit mission. 
C)  developing pricing constraints. 
D)  setting pricing objectives. 
E)  determining the list or quoted price. 
A)  choosing a pricing plan. 
B)  defining a profit mission. 
C)  developing pricing constraints. 
D)  setting pricing objectives. 
E)  determining the list or quoted price.

Question 7

Figure 13-7B
-In the break-even chart in Figure 13-7 above, the wedge ABC represents the firm's

Accepted Answer

A)  fixed costs. 
B)  break-even point. 
C)  loss. 
D)  profit. 
E)  total revenue. 
A)  fixed costs. 
B)  break-even point. 
C)  loss. 
D)  profit. 
E)  total revenue.

Question 8

Demand factors are

Accepted Answer

A)  the various competitors that provide a substituable product or service. 
B)  the price levels that should be charged for a given product. 
C)  the elements that determine consumers' willingness and ability to pay for products. 
D)  the various groups of consumers who want to purchase a product. 
E)  the various groups of consumers who can purchase a product. 
A)  the various competitors that provide a substituable product or service. 
B)  the price levels that should be charged for a given product. 
C)  the elements that determine consumers' willingness and ability to pay for products. 
D)  the various groups of consumers who want to purchase a product. 
E)  the various groups of consumers who can purchase a product.

Question 9

Several pricing objectives relate to a firm's profit. In one known as ________, a company gives up immediate profit in exchange for achieving a higher market share in the hopes of penetrating competitive markets.

Accepted Answer

A)  maximizing current profit 
B)  target return 
C)  break-even strategy 
D)  minimizing risk 
E)  managing for long-run profits 
A)  maximizing current profit 
B)  target return 
C)  break-even strategy 
D)  minimizing risk 
E)  managing for long-run profits

Question 10

If competitive market circumstances are such that there is almost no price competition, no product differentiation, and the only advertising informs prospects that the product is available, then the competitive market in this industry must be

Accepted Answer

A)  a pure monopoly. 
B)  pure competition. 
C)  an oligopoly. 
D)  monopolistic competition. 
E)  monopolistic oligopoly. 
A)  a pure monopoly. 
B)  pure competition. 
C)  an oligopoly. 
D)  monopolistic competition. 
E)  monopolistic oligopoly.

Question 11

Which of these statements about the product life cycle as a pricing constraint is most accurate?

Accepted Answer

A)  The newer a product is, the higher the price that can usually be charged. 
B)  The later in the product life cycle a product is, the higher the price that can usually be charged. 
C)  Once a product is considered nostalgic, the price will continue to rise indefinitely. 
D)  Fads will generally have only two price points-high and low-but the values of those price points usually will be within 10 percent of each other. 
E)  Prices should not be changed until a product reaches its maturity stage. 
A)  The newer a product is, the higher the price that can usually be charged. 
B)  The later in the product life cycle a product is, the higher the price that can usually be charged. 
C)  Once a product is considered nostalgic, the price will continue to rise indefinitely. 
D)  Fads will generally have only two price points-high and low-but the values of those price points usually will be within 10 percent of each other. 
E)  Prices should not be changed until a product reaches its maturity stage.

Question 12

Inelastic demand exists when

Accepted Answer

A)  a small percentage decrease in price produces a smaller percentage increase in quantity demanded. 
B)  a small percentage increase in price produces a larger percentage increase in quantity demanded. 
C)  an increase in price is impossible due to government restrictions. 
D)  the quantity demanded remains the same regardless of any changes in marketing strategies. 
E)  a small percentage decrease in price produces a smaller percentage increase in quantity supplied. 
A)  a small percentage decrease in price produces a smaller percentage increase in quantity demanded. 
B)  a small percentage increase in price produces a larger percentage increase in quantity demanded. 
C)  an increase in price is impossible due to government restrictions. 
D)  the quantity demanded remains the same regardless of any changes in marketing strategies. 
E)  a small percentage decrease in price produces a smaller percentage increase in quantity supplied.

Question 13

The unit variable cost (UVC) divided by selling price (P) is

Accepted Answer

A)  contribution margin (CM). 
B)  fixed costs (F
C) . 
C)  total cost (T
C) . 
D)  total revenue (TR). 
E)  price per unit of the product (P). 
A)  contribution margin (CM). 
B)  fixed costs (F
C) . 
C)  total cost (T
C) . 
D)  total revenue (TR). 
E)  price per unit of the product (P).

Question 14

Which of these are elements of determining cost, volume, and profit relationships in the price-setting process?

Accepted Answer

A)  objectives and constraints 
B)  estimation of demand, sales revenue, and price elasticity 
C)  cost estimation, marginal analysis, and break-even analysis 
D)  demand for the product class and brand, newness of the product, and competition 
E)  market segmentation targeting, and positioning 
A)  objectives and constraints 
B)  estimation of demand, sales revenue, and price elasticity 
C)  cost estimation, marginal analysis, and break-even analysis 
D)  demand for the product class and brand, newness of the product, and competition 
E)  market segmentation targeting, and positioning

Question 15

Economists have identified four types of competitive markets, which are

Accepted Answer

A)  capitalistic, monopolistic, socialist, and communist. 
B)  pure monopoly, monopolistic competition, oligopoly, and pure competition. 
C)  free market, restrained market, government-regulated, and command economy. 
D)  market economy, command economy, traditional economy, and controlled economy. 
E)  open market, consumer-dominated market, service market, and product market. 
A)  capitalistic, monopolistic, socialist, and communist. 
B)  pure monopoly, monopolistic competition, oligopoly, and pure competition. 
C)  free market, restrained market, government-regulated, and command economy. 
D)  market economy, command economy, traditional economy, and controlled economy. 
E)  open market, consumer-dominated market, service market, and product market.

Question 16

Calculate a firm's profit using the following information: the unit price (P) for a product is $40; the quantity sold (Q) is 2,000; the fixed cost (FC) is $50,000; and the variable cost (VC) is $20,000.

Accepted Answer

A)  $10,000 
B)  $50,000 
C)  $110,000 
D)  $150,000 
E)  cannot be determined with the information provided 
A)  $10,000 
B)  $50,000 
C)  $110,000 
D)  $150,000 
E)  cannot be determined with the information provided

Question 17

Figure 13-4A
-Figure 13-4A above shows that when the price for Red Baron frozen cheese pizzas moves from $8 to $6 per unit along the demand curve D1, the quantity demanded

Accepted Answer

A)  increases from 2 to 3 million units per year. 
B)  decreases from 3 to 2 million units per year. 
C)  stays the same. 
D)  increases from 6 to 8 million units per year. 
E)  decreases from 8 to 6 million units per year. 
A)  increases from 2 to 3 million units per year. 
B)  decreases from 3 to 2 million units per year. 
C)  stays the same. 
D)  increases from 6 to 8 million units per year. 
E)  decreases from 8 to 6 million units per year.

Question 18

The break-even point for a large grain farming operation was calculated to be 2 million bushels of corn. Break-even analysis would take place during which step of the price-setting process?

Accepted Answer

A)  identify pricing objectives and constraints 
B)  determine cost, volume, and profit relationships 
C)  estimate demand and revenue 
D)  select an approximate price level 
E)  make special adjustments to list or quoted price 
A)  identify pricing objectives and constraints 
B)  determine cost, volume, and profit relationships 
C)  estimate demand and revenue 
D)  select an approximate price level 
E)  make special adjustments to list or quoted price

Question 19

Basic to setting a product's price is the extent of ________. This information is used in estimating the revenues the firm expects to receive.

Accepted Answer

A)  management's commitment to the product relative to other products in the line 
B)  the product line into which it will be introduced 
C)  customer demand for it 
D)  the firm's promotional budget 
E)  distribution requirements 
A)  management's commitment to the product relative to other products in the line 
B)  the product line into which it will be introduced 
C)  customer demand for it 
D)  the firm's promotional budget 
E)  distribution requirements

Question 20

To reduce the price sensitivity for some of its products, Washburn Guitars

Accepted Answer

A)  uses multiple suppliers for its raw materials. 
B)  offers three months of free music lessons with the purchase of each guitar. 
C)  uses endorsements by internationally known musicians who play Washburn signature guitars. 
D)  offers a lifetime, unconditional warranty on all its instruments regardless of the price of its guitars. 
E)  sponsors free music programs and special Washburn guitar camps for children. 
A)  uses multiple suppliers for its raw materials. 
B)  offers three months of free music lessons with the purchase of each guitar. 
C)  uses endorsements by internationally known musicians who play Washburn signature guitars. 
D)  offers a lifetime, unconditional warranty on all its instruments regardless of the price of its guitars. 
E)  sponsors free music programs and special Washburn guitar camps for children.

Exam 13: Building the Price Foundation

For the sake of simplicity and by convention, price elasticity figures are shown as

Price elasticity of demand is determined by a number of factors, such as the availability of substitutes, the necessity of the product or service, and

A graphic presentation of the break-even analysis that shows the intersection of total revenue and total cost to identify profit or loss for a given quantity sold is referred to as

Which of these would be an example of a fixed cost for a company that makes carbon monoxide monitoring systems for workers to wear in hazardous areas?

Figure 13-7B -In the break-even chart in Figure 13-7 above, the rectangular area EBCD represents the firm's

Specifying the role of price in an organization's marketing and strategic plans is referred to as

Figure 13-7B -In the break-even chart in Figure 13-7 above, the wedge ABC represents the firm's

Demand factors are

Several pricing objectives relate to a firm's profit. In one known as ________, a company gives up immediate profit in exchange for achieving a higher market share in the hopes of penetrating competitive markets.

If competitive market circumstances are such that there is almost no price competition, no product differentiation, and the only advertising informs prospects that the product is available, then the competitive market in this industry must be

Which of these statements about the product life cycle as a pricing constraint is most accurate?

Inelastic demand exists when

The unit variable cost (UVC) divided by selling price (P) is

Which of these are elements of determining cost, volume, and profit relationships in the price-setting process?

Economists have identified four types of competitive markets, which are

Calculate a firm's profit using the following information: the unit price (P) for a product is $40; the quantity sold (Q) is 2,000; the fixed cost (FC) is $50,000; and the variable cost (VC) is $20,000.

Figure 13-4A -Figure 13-4A above shows that when the price for Red Baron frozen cheese pizzas moves from $8 to $6 per unit along the demand curve D1, the quantity demanded

The break-even point for a large grain farming operation was calculated to be 2 million bushels of corn. Break-even analysis would take place during which step of the price-setting process?

Basic to setting a product's price is the extent of ________. This information is used in estimating the revenues the firm expects to receive.

To reduce the price sensitivity for some of its products, Washburn Guitars

Creating Customer Relationships and Value Through Marketing

Developing Successful Organizational and Marketing Strategies

Scanning the Marketing Environment

Ethical and Social Responsibility for Sustainable Marketing

Understanding Consumer Behavior

Understanding Organizations As Customers

Understanding and Reaching Global Consumers and Markets

Marketing Research: From Customer Insights to Actions

Market Segmentation, Targeting, and Positioning

Developing New Products and Services

Managing Successful Products, Services, and Brands

Services Marketing

Arriving at the Final Price

Managing Marketing Channels and Supply Chains

Retailing and Wholesaling

Integrated Marketing Communications and Direct Marketing

Advertising, Sales Promotion, and Public Relations

Using Social Media and Mobile Marketing to Connect With Consumers

Personal Selling and Sales Management

Implementing Interactive and Multi-Channel Marketing

Pulling It All Together: the Strategic Marketing Proces

Building an Effective Marketing Plan

Financial Aspects of Marketing

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