Question 1

Two or more competitors explicitly or implicitly setting prices is referred to as

Accepted Answer

A)  competitive collusion. 
B)  vertical price fixing. 
C)  horizontal price fixing. 
D)  lateral price fixing. 
E)  price cooperation. 
A)  competitive collusion. 
B)  vertical price fixing. 
C)  horizontal price fixing. 
D)  lateral price fixing. 
E)  price cooperation.

Question 2

Explain why odd-even pricing may be successful.

Accepted Answer

Odd-even pricing presumes that

Question 3

When Dell sells various laptops, it also preinstalls Microsoft Office and other software that customers order at a discount before the laptop is shipped. This is an example of

Accepted Answer

A)  price lining. 
B)  product-line pricing. 
C)  bundle pricing. 
D)  customary pricing. 
E)  prestige pricing. 
A)  price lining. 
B)  product-line pricing. 
C)  bundle pricing. 
D)  customary pricing. 
E)  prestige pricing.

Question 4

Tendollars.com offers thousands of gifts, all priced at $10. This is an example of

Accepted Answer

A)  a skimming pricing approach. 
B)  a loss-leader pricing approach. 
C)  a one-price policy. 
D)  a penetration pricing approach. 
E)  an everyday low pricing approach. 
A)  a skimming pricing approach. 
B)  a loss-leader pricing approach. 
C)  a one-price policy. 
D)  a penetration pricing approach. 
E)  an everyday low pricing approach.

Question 5

Mrs. Renfro's, Inc., sells 25 different relishes in 45 different states. Its Chipotle Corn Salsa is so popular that the company struggles to keep its resellers stocked. At $4.50 a jar, its price seems just right to consumers who savor its hot and spicy taste. The popularity of spicy food is an example of a ________ on which Mrs. Renfro's has capitalized.

Accepted Answer

A)  barter factor 
B)  demand factor 
C)  supply factor 
D)  consumer index 
E)  macroeconomic environmental factor 
A)  barter factor 
B)  demand factor 
C)  supply factor 
D)  consumer index 
E)  macroeconomic environmental factor

Question 6

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 7

According to the profit equation, profit equals

Accepted Answer

A)  Total cost + Total revenue. 
B)  Total revenue − Total cost. 
C)  Marginal revenue − Marginal cost. 
D)  Price × Quantity. 
E)  Total revenue + Marginal cost. 
A)  Total cost + Total revenue. 
B)  Total revenue − Total cost. 
C)  Marginal revenue − Marginal cost. 
D)  Price × Quantity. 
E)  Total revenue + Marginal cost.

Question 8

The price-setting process identifies pricing objectives and constraints. Describe the reasons these objectives may change and give examples of objectives a firm may set.

Accepted Answer

Pricing objectives involve specifying th

Question 9

Susan hired an attorney to represent her in a court case involving an auto accident. The attorney charged her a $2,000 retainer fee for the services. Terry needed a haircut; the local stylist charged him $22 for his services. Aaron mowed his neighbor's lawn; in exchange, the neighbor repaired his gutters. The attorney fees, the $12 charged by the hair stylist, and the exchange of lawn mowing for gutter repair are all examples of

Accepted Answer

A)  premiums. 
B)  barter. 
C)  the profit motive. 
D)  price. 
E)  outlays. 
A)  premiums. 
B)  barter. 
C)  the profit motive. 
D)  price. 
E)  outlays.

Question 10

The most commonly used pricing method for business products is

Accepted Answer

A)  target return on investment. 
B)  customary. 
C)  standard markup. 
D)  target profit. 
E)  cost-plus pricing. 
A)  target return on investment. 
B)  customary. 
C)  standard markup. 
D)  target profit. 
E)  cost-plus pricing.

Question 11

All of the following are competition-oriented approaches to selecting an approximate price level except which?

Accepted Answer

A)  loss-leader pricing 
B)  customary pricing 
C)  above-market pricing 
D)  odd-even pricing 
E)  at-market pricing 
A)  loss-leader pricing 
B)  customary pricing 
C)  above-market pricing 
D)  odd-even pricing 
E)  at-market pricing

Question 12

RadioShack, an electronics retail chain, couldn't compete with the prices offered by other retailers. The company enacted price-matching programs and promoted large discounts on its merchandise to raise cash and hopefully stave off bankruptcy. The best pricing objective at this point for RadioShack most likely was

Accepted Answer

A)  profit. 
B)  market share. 
C)  unit volume. 
D)  survival. 
E)  social responsibility. 
A)  profit. 
B)  market share. 
C)  unit volume. 
D)  survival. 
E)  social responsibility.

Question 13

The first Apple iPhone was introduced in 2007 at an initial price of $600. People waited in line overnight so they could be one of the first to own this unique smartphone. Which pricing strategy did Apple use to help recoup its costs for developing the smartphone?

Accepted Answer

A)  penetration pricing 
B)  experience curve pricing 
C)  customary pricing 
D)  skimming pricing 
E)  target pricing 
A)  penetration pricing 
B)  experience curve pricing 
C)  customary pricing 
D)  skimming pricing 
E)  target pricing

Question 14

Lady Marion Seafood, Inc., sells five-pound packages of Alaskan salmon. Assume that its unit variable cost per package is $30 and its fixed cost is $250,000. It wants a target profit of $38,000 based on a volume of 16,000 packages. What should the firm charge for a five-pound package of salmon?

Accepted Answer

A)  $25.00 
B)  $33.94 
C)  $40.00 
D)  $48.00 
E)  $61.25 
A)  $25.00 
B)  $33.94 
C)  $40.00 
D)  $48.00 
E)  $61.25

Question 15

Summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price is referred to as

Accepted Answer

A)  standard markup pricing. 
B)  experience curve pricing. 
C)  cost-plus pricing. 
D)  product-line pricing. 
E)  target return-on-investment pricing. 
A)  standard markup pricing. 
B)  experience curve pricing. 
C)  cost-plus pricing. 
D)  product-line pricing. 
E)  target return-on-investment pricing.

Question 16

Standard markup pricing is considered to be a ________ approach to pricing.

Accepted Answer

A)  demand-oriented 
B)  profit-oriented 
C)  cost-oriented 
D)  competition-oriented 
E)  service-oriented 
A)  demand-oriented 
B)  profit-oriented 
C)  cost-oriented 
D)  competition-oriented 
E)  service-oriented

Question 17

When Amazon introduced the latest Kindle Fire tablet at $49.99 and the average price of competitive models was $323, Amazon was using a ________ pricing strategy.

Accepted Answer

A)  skimming 
B)  price lining 
C)  BOGO 
D)  penetration 
E)  loss-leader 
A)  skimming 
B)  price lining 
C)  BOGO 
D)  penetration 
E)  loss-leader

Question 18

To encourage buyers to stock inventory earlier than their normal demand would require, manufacturers often use

Accepted Answer

A)  quantity discounts. 
B)  quarterly discounts. 
C)  seasonal discounts. 
D)  trade discounts. 
E)  functional discounts. 
A)  quantity discounts. 
B)  quarterly discounts. 
C)  seasonal discounts. 
D)  trade discounts. 
E)  functional discounts.

Question 19

Your local instant photocopying service charges 10 cents a copy up to 25 copies, 9 cents a copy for 26 to 99 copies, and 8 cents a copy for 100 copies or more. What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

Accepted Answer

A)  experience curve pricing 
B)  loss-leader pricing 
C)  a quantity discount 
D)  a promotional discount 
E)  everyday low pricing 
A)  experience curve pricing 
B)  loss-leader pricing 
C)  a quantity discount 
D)  a promotional discount 
E)  everyday low pricing

Question 20

Cash payments or an extra amount of free goods awarded sellers in the channel for undertaking certain advertising or selling activities to promote the product is referred to as a

Accepted Answer

A)  promotional allowance. 
B)  promotional quantity discount. 
C)  seasonal discount. 
D)  promotional purchase inducement. 
E)  dynamic pricing policy. 
A)  promotional allowance. 
B)  promotional quantity discount. 
C)  seasonal discount. 
D)  promotional purchase inducement. 
E)  dynamic pricing policy.

Two or more competitors explicitly or implicitly setting prices is referred to as

Explain why odd-even pricing may be successful.

When Dell sells various laptops, it also preinstalls Microsoft Office and other software that customers order at a discount before the laptop is shipped. This is an example of

Tendollars.com offers thousands of gifts, all priced at $10. This is an example of

Fixed cost is

According to the profit equation, profit equals

The price-setting process identifies pricing objectives and constraints. Describe the reasons these objectives may change and give examples of objectives a firm may set.

The most commonly used pricing method for business products is

All of the following are competition-oriented approaches to selecting an approximate price level except which?

The first Apple iPhone was introduced in 2007 at an initial price of $600. People waited in line overnight so they could be one of the first to own this unique smartphone. Which pricing strategy did Apple use to help recoup its costs for developing the smartphone?

Lady Marion Seafood, Inc., sells five-pound packages of Alaskan salmon. Assume that its unit variable cost per package is $30 and its fixed cost is $250,000. It wants a target profit of $38,000 based on a volume of 16,000 packages. What should the firm charge for a five-pound package of salmon?

Summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price is referred to as

Standard markup pricing is considered to be a ________ approach to pricing.

When Amazon introduced the latest Kindle Fire tablet at $49.99 and the average price of competitive models was $323, Amazon was using a ________ pricing strategy.

To encourage buyers to stock inventory earlier than their normal demand would require, manufacturers often use

Your local instant photocopying service charges 10 cents a copy up to 25 copies, 9 cents a copy for 26 to 99 copies, and 8 cents a copy for 100 copies or more. What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

Cash payments or an extra amount of free goods awarded sellers in the channel for undertaking certain advertising or selling activities to promote the product is referred to as a

Creating Customer Relationships and Value Through Marketing

Developing Successful Organizational and Marketing Strategies

Understanding the Marketing Environment, Ethical Behavior, and Social Responsibility

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

Managing Marketing Channels and Supply Chains

Retailing and Wholesaling

Implementing Interactive and Multichannel Marketing

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

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Exam 11: Pricing Products and Services

Two or more competitors explicitly or implicitly setting prices is referred to as

Explain why odd-even pricing may be successful.

When Dell sells various laptops, it also preinstalls Microsoft Office and other software that customers order at a discount before the laptop is shipped. This is an example of

Tendollars.com offers thousands of gifts, all priced at $10. This is an example of

Fixed cost is

According to the profit equation, profit equals

The price-setting process identifies pricing objectives and constraints. Describe the reasons these objectives may change and give examples of objectives a firm may set.

The most commonly used pricing method for business products is

All of the following are competition-oriented approaches to selecting an approximate price level except which?

The first Apple iPhone was introduced in 2007 at an initial price of $600. People waited in line overnight so they could be one of the first to own this unique smartphone. Which pricing strategy did Apple use to help recoup its costs for developing the smartphone?

Lady Marion Seafood, Inc., sells five-pound packages of Alaskan salmon. Assume that its unit variable cost per package is $30 and its fixed cost is $250,000. It wants a target profit of $38,000 based on a volume of 16,000 packages. What should the firm charge for a five-pound package of salmon?

Summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price is referred to as

Standard markup pricing is considered to be a ________ approach to pricing.

When Amazon introduced the latest Kindle Fire tablet at $49.99 and the average price of competitive models was $323, Amazon was using a ________ pricing strategy.

To encourage buyers to stock inventory earlier than their normal demand would require, manufacturers often use

Your local instant photocopying service charges 10 cents a copy up to 25 copies, 9 cents a copy for 26 to 99 copies, and 8 cents a copy for 100 copies or more. What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

Cash payments or an extra amount of free goods awarded sellers in the channel for undertaking certain advertising or selling activities to promote the product is referred to as a

Creating Customer Relationships and Value Through Marketing

Developing Successful Organizational and Marketing Strategies

Understanding the Marketing Environment, Ethical Behavior, and Social Responsibility

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

Managing Marketing Channels and Supply Chains

Retailing and Wholesaling

Implementing Interactive and Multichannel Marketing

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

Filters