Question 1

Profit is the highest at the point where marginal revenue and marginal cost are equal.

Accepted Answer

A) True 
 B)False

Question 2

Profits for a firm are computed as follows: Profits = TR − FC.

Accepted Answer

A) True 
 B)False

Question 3

Price is a key element in the marketing mix because it relates directly to:

Accepted Answer

A)  the size of the sales force. 
B)  the speed of an exchange. 
C)  quality controls. 
D)  the generation of total revenue. 
E)  brand image. 
A)  the size of the sales force. 
B)  the speed of an exchange. 
C)  quality controls. 
D)  the generation of total revenue. 
E)  brand image.

Question 4

Marginal analysis involves examining:

Accepted Answer

A)  what happens to a firm's costs and revenues when production is changed by one unit. 
B)  the sensitivity of consumer demand for a product or product category. 
C)  the quantity of products expected to be sold at different prices. 
D)  the difference between marginal revenue and total revenue. 
E)  the difference between marginal cost and total cost. 
A)  what happens to a firm's costs and revenues when production is changed by one unit. 
B)  the sensitivity of consumer demand for a product or product category. 
C)  the quantity of products expected to be sold at different prices. 
D)  the difference between marginal revenue and total revenue. 
E)  the difference between marginal cost and total cost.

Question 5

Demand depends only on the price of the product.

Accepted Answer

A) True 
 B)False

Question 6

A market share objective:

Accepted Answer

A)  is not recommended when sales for the total industry are declining. 
B)  is not especially useful when sales for the total industry are increasing. 
C)  is not especially useful when sales for the total industry are flat. 
D)  can be used primarily in an industry where total sales are increasing. 
E)  can be used effectively whether total industry sales are rising or falling. 
A)  is not recommended when sales for the total industry are declining. 
B)  is not especially useful when sales for the total industry are increasing. 
C)  is not especially useful when sales for the total industry are flat. 
D)  can be used primarily in an industry where total sales are increasing. 
E)  can be used effectively whether total industry sales are rising or falling.

Question 7

What are the components of total cost? Give specific examples.

Accepted Answer

Total cost is the sum of the average fix

Question 8

Which of the following statements about markup pricing is correct?

Accepted Answer

A)  The use of similar markups reduces price competition. 
B)  Markup pricing is inconvenient to use. 
C)  Markup pricing results in a high price when demand is high and a low price when demand is low. 
D)  Markup pricing is a demand-based pricing method. 
E)  Using markups makes pricing a time-consuming, difficult process. 
A)  The use of similar markups reduces price competition. 
B)  Markup pricing is inconvenient to use. 
C)  Markup pricing results in a high price when demand is high and a low price when demand is low. 
D)  Markup pricing is a demand-based pricing method. 
E)  Using markups makes pricing a time-consuming, difficult process.

Question 9

A measure of the sensitivity of demand in relation to changes in price is:

Accepted Answer

A)  a demand curve. 
B)  a prestige graph. 
C)  marginal analysis. 
D)  price elasticity of demand. 
E)  quantity elasticity. 
A)  a demand curve. 
B)  a prestige graph. 
C)  marginal analysis. 
D)  price elasticity of demand. 
E)  quantity elasticity.

Question 10

Compare and contrast price skimming and penetration pricing.

Accepted Answer

Price skimming is the strategy of chargi

Question 11

One advantage of non-price competition is that:

Accepted Answer

A)  a firm can react quickly to competitive efforts. 
B)  market share becomes less important. 
C)  a firm can build customer loyalty. 
D)  marketing efforts are completely eliminated. 
E)  pricing is no longer a factor. 
A)  a firm can react quickly to competitive efforts. 
B)  market share becomes less important. 
C)  a firm can build customer loyalty. 
D)  marketing efforts are completely eliminated. 
E)  pricing is no longer a factor.

Question 12

Sony management decided to use skimming as a pricing strategy for its newest line of high-definition television (HDTV) sets. It should be aware that this strategy does not:

Accepted Answer

A)  generate capital to cover research and development costs. 
B)  discourage competitors from entering the market. 
C)  provide flexibility in the introductory base price. 
D)  protect the firm from covering costs if prices are set too low. 
E)  reduce the stress that may be placed on the firm's production capabilities. 
A)  generate capital to cover research and development costs. 
B)  discourage competitors from entering the market. 
C)  provide flexibility in the introductory base price. 
D)  protect the firm from covering costs if prices are set too low. 
E)  reduce the stress that may be placed on the firm's production capabilities.

Question 13

What are some of the objectives a firm might hope to achieve when setting prices?

Accepted Answer

The first step in setting prices is deve

Question 14

A major reason why retailers use markup pricing is that it is convenient.

Accepted Answer

A) True 
 B)False

Question 15

Roberts Electronics calculates that if it produces 15 radar detectors, its costs are $1,500, and if it produces 16 radar detectors, its costs are $1,590. In this instance, $90 is the firm's cost.

Accepted Answer

A)  average 
B)  fixed 
C)  variable 
D)  marginal 
E)  average variable 
A)  average 
B)  fixed 
C)  variable 
D)  marginal 
E)  average variable

Question 16

Marketers improve their ability to establish prices appropriately when:

Accepted Answer

A)  there is non-price competition. 
B)  they know the prices charged for competing brands. 
C)  their products are of better quality than the competition's. 
D)  the main objective is image building. 
E)  using psychological pricing. 
A)  there is non-price competition. 
B)  they know the prices charged for competing brands. 
C)  their products are of better quality than the competition's. 
D)  the main objective is image building. 
E)  using psychological pricing.

Question 17

If a company provides price differentials that harm competition by giving one or more buyers a competitive advantage, it is committing:

Accepted Answer

A)  periodic discounting. 
B)  price-consciousness. 
C)  functional discounting. 
D)  price competition. 
E)  price fixing. 
A)  periodic discounting. 
B)  price-consciousness. 
C)  functional discounting. 
D)  price competition. 
E)  price fixing.

Question 18

Under Armor is establishing a pricing objective to maintain or increase its product's sales in relation to total industry sales.

Accepted Answer

A)  return on investment 
B)  survival 
C)  product quality 
D)  market share 
E)  status quo 
A)  return on investment 
B)  survival 
C)  product quality 
D)  market share 
E)  status quo

Question 19

If the product price is $100, average variable cost $40 per unit, and the total fixed costs are $120,000, what is the break-even point?

Accepted Answer

A)  500 units 
B)  2,000 units 
C)  1,200 units 
D)  300 units 
E)  3,000 units 
A)  500 units 
B)  2,000 units 
C)  1,200 units 
D)  300 units 
E)  3,000 units

Question 20

If Nabisco wants to quickly gain a large market share with its new line of reduced-fat snack crackers, it should use:

Accepted Answer

A)  penetration pricing. 
B)  random discounting. 
C)  captive pricing. 
D)  price skimming. 
E)  everyday low prices. 
A)  penetration pricing. 
B)  random discounting. 
C)  captive pricing. 
D)  price skimming. 
E)  everyday low prices.

Profit is the highest at the point where marginal revenue and marginal cost are equal.

Profits for a firm are computed as follows: Profits = TR − FC.

Price is a key element in the marketing mix because it relates directly to:

Marginal analysis involves examining:

Demand depends only on the price of the product.

A market share objective:

What are the components of total cost? Give specific examples.

Which of the following statements about markup pricing is correct?

A measure of the sensitivity of demand in relation to changes in price is:

Compare and contrast price skimming and penetration pricing.

One advantage of non-price competition is that:

Sony management decided to use skimming as a pricing strategy for its newest line of high-definition television (HDTV) sets. It should be aware that this strategy does not:

What are some of the objectives a firm might hope to achieve when setting prices?

A major reason why retailers use markup pricing is that it is convenient.

Roberts Electronics calculates that if it produces 15 radar detectors, its costs are $1,500, and if it produces 16 radar detectors, its costs are $1,590. In this instance, $90 is the firm's cost.

Marketers improve their ability to establish prices appropriately when:

If a company provides price differentials that harm competition by giving one or more buyers a competitive advantage, it is committing:

Under Armor is establishing a pricing objective to maintain or increase its product's sales in relation to total industry sales.

If the product price is $100, average variable cost $40 per unit, and the total fixed costs are $120,000, what is the break-even point?

If Nabisco wants to quickly gain a large market share with its new line of reduced-fat snack crackers, it should use:

Customer-Driven Strategic Marketing

Planning, Implementing, and Evaluating Marketing Strategies

The Marketing Environment, Social Responsibility, and Ethics

Marketing Research and Information Systems

Target Markets: Segmentation and Evaluation

Consumer Buying Behavior

Business Markets and Buying Behavior

Reaching Global Markets

Digital Marketing and Social Networking

Product, Branding, and Packaging Concepts

Developing and Managing Goods and Services

Marketing Channels and Supply-Chain Management

Retailing, Direct Marketing, and Wholesaling

Integrated Marketing Communications

Advertising and Public Relations

Personal Selling and Sales Promotion

Filters

Exam 12: Pricing Concepts and Management

Profit is the highest at the point where marginal revenue and marginal cost are equal.

Profits for a firm are computed as follows: Profits = TR − FC.

Price is a key element in the marketing mix because it relates directly to:

Marginal analysis involves examining:

Demand depends only on the price of the product.

A market share objective:

What are the components of total cost? Give specific examples.

Which of the following statements about markup pricing is correct?

A measure of the sensitivity of demand in relation to changes in price is:

Compare and contrast price skimming and penetration pricing.

One advantage of non-price competition is that:

Sony management decided to use skimming as a pricing strategy for its newest line of high-definition television (HDTV) sets. It should be aware that this strategy does not:

What are some of the objectives a firm might hope to achieve when setting prices?

A major reason why retailers use markup pricing is that it is convenient.

Roberts Electronics calculates that if it produces 15 radar detectors, its costs are $1,500, and if it produces 16 radar detectors, its costs are $1,590. In this instance, $90 is the firm's cost.

Marketers improve their ability to establish prices appropriately when:

If a company provides price differentials that harm competition by giving one or more buyers a competitive advantage, it is committing:

Under Armor is establishing a pricing objective to maintain or increase its product's sales in relation to total industry sales.

If the product price is $100, average variable cost $40 per unit, and the total fixed costs are $120,000, what is the break-even point?

If Nabisco wants to quickly gain a large market share with its new line of reduced-fat snack crackers, it should use:

Customer-Driven Strategic Marketing

Planning, Implementing, and Evaluating Marketing Strategies

The Marketing Environment, Social Responsibility, and Ethics

Marketing Research and Information Systems

Target Markets: Segmentation and Evaluation

Consumer Buying Behavior

Business Markets and Buying Behavior

Reaching Global Markets

Digital Marketing and Social Networking

Product, Branding, and Packaging Concepts

Developing and Managing Goods and Services

Marketing Channels and Supply-Chain Management

Retailing, Direct Marketing, and Wholesaling

Integrated Marketing Communications

Advertising and Public Relations

Personal Selling and Sales Promotion

Filters