Question 1

Costs related to supply and costs related to demand are the two primary cost categories.

Accepted Answer

A) True 
 B)False

Question 2

________ products are products whose demands are positively related and as such, they rise or fall together.

Accepted Answer

A)  Substitute 
B)  Premium 
C)  Elastic 
D)  Inelastic 
E)  Complementary 
A)  Substitute 
B)  Premium 
C)  Elastic 
D)  Inelastic 
E)  Complementary

Question 3

Most public colleges charge less than half the price of similar private colleges. How can each type of college be delivering value?

Accepted Answer

Consumers want high value. High value ca

Question 4

When Delta increases its average fares, American Airlines and United often follow with similar increases. This is an example of

Accepted Answer

A)  competitor orientation. 
B)  customer orientation. 
C)  status quo pricing. 
D)  adding value. 
A)  competitor orientation. 
B)  customer orientation. 
C)  status quo pricing. 
D)  adding value.

Question 5

For which of the following is demand likely to be most sensitive to price increases?

Accepted Answer

A)  prescription drugs 
B)  college tuition for last-semester seniors 
C)  electricity 
D)  hospital care 
E)  a specific brand of soft drink 
A)  prescription drugs 
B)  college tuition for last-semester seniors 
C)  electricity 
D)  hospital care 
E)  a specific brand of soft drink

Question 6

The more substitutes that exist in a market,

Accepted Answer

A)  the lower the price elasticity for each product. 
B)  the greater the income elasticity for each product. 
C)  the easier it will be to utilize a target profit pricing strategy. 
D)  the more sensitive consumers will be to changes in the price of a particular product. 
E)  the more likely the market will be characterized as an oligopoly. 
A)  the lower the price elasticity for each product. 
B)  the greater the income elasticity for each product. 
C)  the easier it will be to utilize a target profit pricing strategy. 
D)  the more sensitive consumers will be to changes in the price of a particular product. 
E)  the more likely the market will be characterized as an oligopoly.

Question 7

At Ben's college, the local Dunkin' Donuts gives a 10 percent discount to students. Is this price discrimination? Why or why not?

Accepted Answer

When firms sell the same product to diff

Question 8

Health clubs often use a low introductory offer price to get people to join their club. These low prices represent a ________ pricing strategy.

Accepted Answer

A)  maximizing profits 
B)  target profit 
C)  target return 
D)  status quo 
E)  sales orientation 
A)  maximizing profits 
B)  target profit 
C)  target return 
D)  status quo 
E)  sales orientation

Question 9

Earl was known for driving 30 miles just to save a dollar on the price of his favorite beverage. Earl perceived price as ________ for a good or service, while most consumers recognize price as the ________ made to acquire a good or service.

Accepted Answer

A)  the money paid; overall sacrifice 
B)  a variable cost; fixed cost 
C)  a fixed cost; variable payment 
D)  the overall sacrifice; monetary payment 
E)  the break-even amount; total cost 
A)  the money paid; overall sacrifice 
B)  a variable cost; fixed cost 
C)  a fixed cost; variable payment 
D)  the overall sacrifice; monetary payment 
E)  the break-even amount; total cost

Question 10

Why are price wars more common in oligopolies than in pure competition markets?

Accepted Answer

In oligopolies, there are only a few fir

Question 11

Jacob rents rooms in his hotel for an average of $100 per night. The variable cost per rented room is $20, to cover maid service and utilities. His fixed costs are $100,000 and his profit last year was $20,000. For Jacob, the contribution per unit is

Accepted Answer

A)  $100. 
B)  $80. 
C)  $800. 
D)  $1,000. 
E)  It cannot be determined from the information provided. 
A)  $100. 
B)  $80. 
C)  $800. 
D)  $1,000. 
E)  It cannot be determined from the information provided.

Question 12

Variable costs change with

Accepted Answer

A)  changes in fixed costs. 
B)  changes in cross-price elasticity. 
C)  changes in target return pricing. 
D)  changes in the quantity being produced. 
E)  competitive parity. 
A)  changes in fixed costs. 
B)  changes in cross-price elasticity. 
C)  changes in target return pricing. 
D)  changes in the quantity being produced. 
E)  competitive parity.

Question 13

Small-business consultants are constantly admonishing would-be entrepreneurs, "Beware of the overhead." Using an overhead (fixed costs) of $100,000 and then an overhead of $200,000, with a contribution per unit of $50, determine the break-even points.

Accepted Answer

With an overhead of $100,000 and a contr

Question 14

One problem in relying on price elasticity and demand curves when setting prices is

Accepted Answer

A)  the way a product or service is marketed can have a profound impact on price elasticity. 
B)  the underlying ideas of the demand curve and elasticity are less relevant in the modern economy. 
C)  only economists can properly analyze demand curves and set prices using this tool. 
D)  competitors can construct the same demand curves, so there is no advantage in using them. 
E)  marketing split from economics over the ideas of demand and elasticity. 
A)  the way a product or service is marketed can have a profound impact on price elasticity. 
B)  the underlying ideas of the demand curve and elasticity are less relevant in the modern economy. 
C)  only economists can properly analyze demand curves and set prices using this tool. 
D)  competitors can construct the same demand curves, so there is no advantage in using them. 
E)  marketing split from economics over the ideas of demand and elasticity.

Question 15

Dynamic pricing is also referred to as individualized pricing.

Accepted Answer

A) True 
 B)False

Question 16

Because there are many firms in monopolistic competition markets,

Accepted Answer

A)  everyone is a price taker. 
B)  producers do not have to consider the reactions of rival firms. 
C)  government often encourages consolidation to reduce the number of competitors. 
D)  price controls may be implemented. 
E)  the many competitors will focus on product differentiation. 
A)  everyone is a price taker. 
B)  producers do not have to consider the reactions of rival firms. 
C)  government often encourages consolidation to reduce the number of competitors. 
D)  price controls may be implemented. 
E)  the many competitors will focus on product differentiation.

Question 17

Cross-price elasticity is the

Accepted Answer

A)  percentage change in quantity of a product demanded divided by the percentage change in its price. 
B)  percentage change in quantity demanded of Product A compared to the percentage change in price of Product B. 
C)  change in price of Product A divided by change in quantity demanded for Product B. 
D)  change in quantity of a product demanded divided by the change in its price. 
E)  change in quantity of a product demanded divided by the change in its elasticity. 
A)  percentage change in quantity of a product demanded divided by the percentage change in its price. 
B)  percentage change in quantity demanded of Product A compared to the percentage change in price of Product B. 
C)  change in price of Product A divided by change in quantity demanded for Product B. 
D)  change in quantity of a product demanded divided by the change in its price. 
E)  change in quantity of a product demanded divided by the change in its elasticity.

Question 18

The Coffee Express company is located in a business district with few customers on the weekend. To attract customers on Saturday and Sundays, it reduces its prices on these two days. This is an example of

Accepted Answer

A)  dynamic pricing. 
B)  the substitution effect. 
C)  the income effect. 
D)  the target return effect. 
E)  cross-price elasticity. 
A)  dynamic pricing. 
B)  the substitution effect. 
C)  the income effect. 
D)  the target return effect. 
E)  cross-price elasticity.

Question 19

Why do marketers of new and innovative products often start out with a price skimming strategy rather than a penetration strategy?

Accepted Answer

In many markets, and particularly for ne

Question 20

When a retail store rarely sells deeply discounted or sale products, it is known as "everyday low pricing."

Accepted Answer

A) True 
 B)False

Costs related to supply and costs related to demand are the two primary cost categories.

________ products are products whose demands are positively related and as such, they rise or fall together.

Most public colleges charge less than half the price of similar private colleges. How can each type of college be delivering value?

When Delta increases its average fares, American Airlines and United often follow with similar increases. This is an example of

For which of the following is demand likely to be most sensitive to price increases?

The more substitutes that exist in a market,

At Ben's college, the local Dunkin' Donuts gives a 10 percent discount to students. Is this price discrimination? Why or why not?

Health clubs often use a low introductory offer price to get people to join their club. These low prices represent a ________ pricing strategy.

Earl was known for driving 30 miles just to save a dollar on the price of his favorite beverage. Earl perceived price as for a good or service, while most consumers recognize price as the made to acquire a good or service.

Why are price wars more common in oligopolies than in pure competition markets?

Jacob rents rooms in his hotel for an average of $100 per night. The variable cost per rented room is $20, to cover maid service and utilities. His fixed costs are $100,000 and his profit last year was $20,000. For Jacob, the contribution per unit is

Variable costs change with

Small-business consultants are constantly admonishing would-be entrepreneurs, "Beware of the overhead." Using an overhead (fixed costs) of $100,000 and then an overhead of $200,000, with a contribution per unit of $50, determine the break-even points.

One problem in relying on price elasticity and demand curves when setting prices is

Dynamic pricing is also referred to as individualized pricing.

Because there are many firms in monopolistic competition markets,

Cross-price elasticity is the

The Coffee Express company is located in a business district with few customers on the weekend. To attract customers on Saturday and Sundays, it reduces its prices on these two days. This is an example of

Why do marketers of new and innovative products often start out with a price skimming strategy rather than a penetration strategy?

When a retail store rarely sells deeply discounted or sale products, it is known as "everyday low pricing."

Overview of Marketing

Developing Marketing Strategies and a Marketing Plan

Social and Mobile Marketing

Conscious Marketing, Corporate Social Responsibility, and Ethics

Analyzing the Marketing Environment

Consumer Behavior

Business-To-Business Marketing

Global Marketing

Segmentation, Targeting, and Positioning

Marketing Research

Product, Branding, and Packaging Decisions

Developing New Products

Services: the Intangible Product

Supply Chain and Channel Management

Retailing and Omnichannel Marketing

Integrated Marketing Communications

Advertising, Public Relations, and Sales Promotions

Personal Selling and Sales Management

Filters

Exam 14: Pricing Concepts for Establishing Value

Costs related to supply and costs related to demand are the two primary cost categories.

________ products are products whose demands are positively related and as such, they rise or fall together.

Most public colleges charge less than half the price of similar private colleges. How can each type of college be delivering value?

When Delta increases its average fares, American Airlines and United often follow with similar increases. This is an example of

For which of the following is demand likely to be most sensitive to price increases?

The more substitutes that exist in a market,

At Ben's college, the local Dunkin' Donuts gives a 10 percent discount to students. Is this price discrimination? Why or why not?

Health clubs often use a low introductory offer price to get people to join their club. These low prices represent a ________ pricing strategy.

Earl was known for driving 30 miles just to save a dollar on the price of his favorite beverage. Earl perceived price as ________ for a good or service, while most consumers recognize price as the ________ made to acquire a good or service.

Why are price wars more common in oligopolies than in pure competition markets?

Jacob rents rooms in his hotel for an average of $100 per night. The variable cost per rented room is $20, to cover maid service and utilities. His fixed costs are $100,000 and his profit last year was $20,000. For Jacob, the contribution per unit is

Variable costs change with

Small-business consultants are constantly admonishing would-be entrepreneurs, "Beware of the overhead." Using an overhead (fixed costs) of $100,000 and then an overhead of $200,000, with a contribution per unit of $50, determine the break-even points.

One problem in relying on price elasticity and demand curves when setting prices is

Dynamic pricing is also referred to as individualized pricing.

Because there are many firms in monopolistic competition markets,

Cross-price elasticity is the

The Coffee Express company is located in a business district with few customers on the weekend. To attract customers on Saturday and Sundays, it reduces its prices on these two days. This is an example of

Why do marketers of new and innovative products often start out with a price skimming strategy rather than a penetration strategy?

When a retail store rarely sells deeply discounted or sale products, it is known as "everyday low pricing."

Overview of Marketing

Developing Marketing Strategies and a Marketing Plan

Social and Mobile Marketing

Conscious Marketing, Corporate Social Responsibility, and Ethics

Analyzing the Marketing Environment

Consumer Behavior

Business-To-Business Marketing

Global Marketing

Segmentation, Targeting, and Positioning

Marketing Research

Product, Branding, and Packaging Decisions

Developing New Products

Services: the Intangible Product

Supply Chain and Channel Management

Retailing and Omnichannel Marketing

Integrated Marketing Communications

Advertising, Public Relations, and Sales Promotions

Personal Selling and Sales Management

Filters

Earl was known for driving 30 miles just to save a dollar on the price of his favorite beverage. Earl perceived price as for a good or service, while most consumers recognize price as the made to acquire a good or service.