Question 1

Which of these statements about price elasticity of demand is most accurate?

Accepted Answer

A)  The more substitutes a product has, the more likely it is to be price elastic. 
B)  All products show some price inelasticity. 
C)  Nondiscretionary (necessary) purchases are price elastic. 
D)  With inelastic demand, reducing price has a very large impact on revenues. 
E)  With inelastic demand, manufacturers change prices frequently to capitalize on consumer behavior. 
A)  The more substitutes a product has, the more likely it is to be price elastic. 
B)  All products show some price inelasticity. 
C)  Nondiscretionary (necessary) purchases are price elastic. 
D)  With inelastic demand, reducing price has a very large impact on revenues. 
E)  With inelastic demand, manufacturers change prices frequently to capitalize on consumer behavior.

Question 2

Which of these statements regarding price changes is most accurate?

Accepted Answer

A)  Prices for tangible goods should change monthly, whereas service prices should change quarterly. 
B)  Changing a product's price too frequently creates antagonism among consumers, yet changing prices too infrequently makes them feel the company is not improving its product sufficiently. 
C)  Supermarkets should change their prices every week since customers are expecting new prices in the weekly flyers they receive in the mail. 
D)  Companies selling products online can instantly change their prices whenever the need arises. 
E)  Internet price changes are regulated by the Internet Fair Practices Act to protect consumers against price gouging. 
A)  Prices for tangible goods should change monthly, whereas service prices should change quarterly. 
B)  Changing a product's price too frequently creates antagonism among consumers, yet changing prices too infrequently makes them feel the company is not improving its product sufficiently. 
C)  Supermarkets should change their prices every week since customers are expecting new prices in the weekly flyers they receive in the mail. 
D)  Companies selling products online can instantly change their prices whenever the need arises. 
E)  Internet price changes are regulated by the Internet Fair Practices Act to protect consumers against price gouging.

Question 3

Which of these statements about consumer demand as a pricing constraint is most accurate?

Accepted Answer

A)  The price charged by competitors for similar offerings has little effect on the price a seller can charge unless there are very few potential buyers. 
B)  The number of potential buyers for the product affects the price a seller can charge, but only if the product is using a push strategy in the channel. 
C)  The number of potential buyers for the product affects the price a seller can charge, but only if the product is a necessity item. 
D)  The number of potential buyers for the brand affects the price a seller can charge in the growth stage of a product life cycle, but not in the introductory stage. 
E)  The number of potential buyers generally affects the price a seller can charge. 
A)  The price charged by competitors for similar offerings has little effect on the price a seller can charge unless there are very few potential buyers. 
B)  The number of potential buyers for the product affects the price a seller can charge, but only if the product is using a push strategy in the channel. 
C)  The number of potential buyers for the product affects the price a seller can charge, but only if the product is a necessity item. 
D)  The number of potential buyers for the brand affects the price a seller can charge in the growth stage of a product life cycle, but not in the introductory stage. 
E)  The number of potential buyers generally affects the price a seller can charge.

Question 4

Figure 13-3
-In Figure 13-3 above, column B represents which type of competitive market?

Accepted Answer

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

Question 5

Marketers may engage in value pricing, which is the practice of simultaneously ________ while maintaining or decreasing price.

Accepted Answer

A)  promoting specific product and service benefits 
B)  increasing product and service benefits 
C)  decreasing profit 
D)  analyzing benefits 
E)  decreasing cost 
A)  promoting specific product and service benefits 
B)  increasing product and service benefits 
C)  decreasing profit 
D)  analyzing benefits 
E)  decreasing cost

Question 6

A maximizing current profit pricing objective implies that a company chooses to

Accepted Answer

A)  set targets for which performance can be measured quickly. 
B)  give up immediate profit in exchange for achieving a higher market share in hopes of penetrating competitive markets. 
C)  set a profit goal that is often determined by its board of directors. 
D)  reduce investment in any further market or product research. 
E)  set prices based on return on sales. 
A)  set targets for which performance can be measured quickly. 
B)  give up immediate profit in exchange for achieving a higher market share in hopes of penetrating competitive markets. 
C)  set a profit goal that is often determined by its board of directors. 
D)  reduce investment in any further market or product research. 
E)  set prices based on return on sales.

Question 7

Figure 13-7B
-In the break-even chart in Figure 13-7 above, the triangular area GAF 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 8

The competitive market situation in which many sellers compete on nonprice factors is referred to as

Accepted Answer

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

Question 9

Figure 13-3
-In Figure 13-3 above, column D represents which type of competitive market?

Accepted Answer

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

Question 10

When estimating demand, price is not the only factor to be considered. Three other elements are emphasized by economists, one of which is

Accepted Answer

A)  consumer tastes. 
B)  legislative changes. 
C)  size of the target market. 
D)  current political stability. 
E)  promotional methods. 
A)  consumer tastes. 
B)  legislative changes. 
C)  size of the target market. 
D)  current political stability. 
E)  promotional methods.

Question 11

A break-even chart is a graphic presentation

Accepted Answer

A)  that shows the maximum number of units that will be sold at a certain price. 
B)  of a break-even analysis that shows when total revenue and total cost intersect to identify profit or loss for a given quantity sold. 
C)  that relates variable costs in terms of product or service substitutes in order to determine which items or services would least affect total revenues. 
D)  that relates profits and revenues versus total costs in order to determine the time frame in which a company could achieve profitability. 
E)  of a form of scatter graph used to identify specific activities or items that are creating the greatest return on investment. 
A)  that shows the maximum number of units that will be sold at a certain price. 
B)  of a break-even analysis that shows when total revenue and total cost intersect to identify profit or loss for a given quantity sold. 
C)  that relates variable costs in terms of product or service substitutes in order to determine which items or services would least affect total revenues. 
D)  that relates profits and revenues versus total costs in order to determine the time frame in which a company could achieve profitability. 
E)  of a form of scatter graph used to identify specific activities or items that are creating the greatest return on investment.

Question 12

Many cosmetology schools allow their advanced students to style hair for "real-world" clients for a reduced fee. The students benefit from the experience, the clients get a less expensive haircut, and the school provides students with additional training while generating revenue as well. The haircut pricing is an example of

Accepted Answer

A)  value pricing. 
B)  societal pricing. 
C)  revenue sharing. 
D)  barter. 
E)  cost-assist pricing. 
A)  value pricing. 
B)  societal pricing. 
C)  revenue sharing. 
D)  barter. 
E)  cost-assist pricing.

Question 13

Washburn Guitars markets its guitars to four distinct market segments. The firm's batch-custom instruments are targeted at

Accepted Answer

A)  first-time buyers. 
B)  professional musicians. 
C)  celebrities. 
D)  large institutional buyers such as band programs. 
E)  intermediate-skill players who may become professional musicians. 
A)  first-time buyers. 
B)  professional musicians. 
C)  celebrities. 
D)  large institutional buyers such as band programs. 
E)  intermediate-skill players who may become professional musicians.

Question 14

Three different pricing objectives relate to a firm's profit. One objective, known as ________, is common in many firms because the targets can be set and performance measured quickly though sometimes criticized for its short-term orientation.

Accepted Answer

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

Question 15

If competitive market circumstances are such that there is no price competition, no product differentiation, and the purpose of advertising is to increase demand for the product class, then ________ must exist in the industry.

Accepted Answer

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

Question 16

VIZIO's HDTVs are sold through all of these types of retailers exceptwhich?

Accepted Answer

A)  Amazon.com 
B)  mass merchandisers, such as Target 
C)  its own brick-and-mortar stores 
D)  wholesale club stores such as Sam's Club 
E)  electronics stores such as Best Buy 
A)  Amazon.com 
B)  mass merchandisers, such as Target 
C)  its own brick-and-mortar stores 
D)  wholesale club stores such as Sam's Club 
E)  electronics stores such as Best Buy

Question 17

Fixed cost is

Accepted Answer

A)  the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold. 
B)  the total expense incurred by a firm in producing and marketing a product, which equals the sum of overhead cost and variable cost. 
C)  the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold. 
D)  the average amount of money received for selling one unit of a product or simply the price of that unit. 
E)  the change in expenses that results from producing and marketing one additional unit of a product. 
A)  the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold. 
B)  the total expense incurred by a firm in producing and marketing a product, which equals the sum of overhead cost and variable cost. 
C)  the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold. 
D)  the average amount of money received for selling one unit of a product or simply the price of that unit. 
E)  the change in expenses that results from producing and marketing one additional unit of a product.

Question 18

When it was launched, the BMW Streetcarver was the only skateboard with stabilizers and wheel design based on BMW's automobiles. This technology gave the BMW Streetcarver better control at high speeds and around sharp turns than any other brand. The skateboard was priced at $495, which left many consumers (especially young males) who might have wanted to buy the Streetcarver unable to afford it. This inability to pay for the high-priced BMW-made skateboard shows the effect of ________ on sales.

Accepted Answer

A)  demand factors 
B)  macroeconomic environmental factors 
C)  barter factors 
D)  supply factors 
E)  exchange parameters 
A)  demand factors 
B)  macroeconomic environmental factors 
C)  barter factors 
D)  supply factors 
E)  exchange parameters

Question 19

Which of these best illustrates a shift in the demand curve?

Accepted Answer

A)  When prices remain the same, there is a significant change in supply. 
B)  As the price is raised, the quantity demanded increases, assuming all else stays the same. 
C)  When prices remain the same, there is an increase or decrease in demand. 
D)  As the price is lowered, the quantity demanded decreases, assuming all else stays the same. 
E)  An internal matter has forced a price change of some type, but it does not impact demand. 
A)  When prices remain the same, there is a significant change in supply. 
B)  As the price is raised, the quantity demanded increases, assuming all else stays the same. 
C)  When prices remain the same, there is an increase or decrease in demand. 
D)  As the price is lowered, the quantity demanded decreases, assuming all else stays the same. 
E)  An internal matter has forced a price change of some type, but it does not impact demand.

Question 20

Pure competition is the competitive situation in which

Accepted Answer

A)  many sellers follow market price for identical, commodity products. 
B)  one seller sets the price for a unique product. 
C)  few sellers are sensitive to one another's prices. 
D)  many sellers compete on nonprice factors. 
E)  one or few sellers compete solely on nonprice factors. 
A)  many sellers follow market price for identical, commodity products. 
B)  one seller sets the price for a unique product. 
C)  few sellers are sensitive to one another's prices. 
D)  many sellers compete on nonprice factors. 
E)  one or few sellers compete solely on nonprice factors.

Exam 13: Building the Price Foundation

Which of these statements about price elasticity of demand is most accurate?

Which of these statements regarding price changes is most accurate?

Which of these statements about consumer demand as a pricing constraint is most accurate?

Figure 13-3 -In Figure 13-3 above, column B represents which type of competitive market?

Marketers may engage in value pricing, which is the practice of simultaneously ________ while maintaining or decreasing price.

A maximizing current profit pricing objective implies that a company chooses to

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

The competitive market situation in which many sellers compete on nonprice factors is referred to as

Figure 13-3 -In Figure 13-3 above, column D represents which type of competitive market?

When estimating demand, price is not the only factor to be considered. Three other elements are emphasized by economists, one of which is

A break-even chart is a graphic presentation

Washburn Guitars markets its guitars to four distinct market segments. The firm's batch-custom instruments are targeted at

Three different pricing objectives relate to a firm's profit. One objective, known as ________, is common in many firms because the targets can be set and performance measured quickly though sometimes criticized for its short-term orientation.

If competitive market circumstances are such that there is no price competition, no product differentiation, and the purpose of advertising is to increase demand for the product class, then ________ must exist in the industry.

VIZIO's HDTVs are sold through all of these types of retailers exceptwhich?

Fixed cost is

Which of these best illustrates a shift in the demand curve?

Pure competition is the competitive situation in which

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Scanning the Marketing Environment

Ethical and Social Responsibility for Sustainable Marketing

Understanding Consumer Behavior

Understanding Organizations As Customers

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Marketing Research: From Customer Insights to Actions

Market Segmentation, Targeting, and Positioning

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Managing Successful Products, Services, and Brands

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