Exam 11: Pricing Products and Services

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Some firms pursue a ________ pricing objective to generate cash to ward off bankruptcy.

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Price is

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Mark Johnson, the manager of a discount consumer electronics store, was approached by the manufacturer's representative on behalf of a marketer of a popular and profitable line of storage racks. The manufacturer's representative implied that if Johnson didn't raise the retail prices for the storage racks to those paid by the marketer's non-discount customers, Johnson's supply of racks may be severely curtailed. The manufacturer's representative was guilty of attempting

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Companies often pursue a market share objective when

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Creative marketers engage in value-pricing, which is the practice of simultaneously increasing product and service benefits while

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In the purchase of the sugar substitute Splenda, you may compare it to something you know about like real sugar. Although Splenda is more expensive than sugar, it is purchased by many consumers because it sweetens with no calories. This situation involves the consumer considering

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All of the following are examples of pricing objectives except which?

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Loss-leader pricing refers to

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Managing for long-run profits as a pricing objective implies that a company will

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The Brazilian government wants to build a global positioning satellite (GPS) system. The satellite manufacturer will receive a mutually agreed upon profit over and above all costs associated with the project. The pricing approach the satellite manufacturer uses is called

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In controversial move, Amazon.com was caught manipulating its prices. Avid DVD buyers, buying in quantity for resale, found that the online retailer was offering different customers different prices for the same DVD, and complained vociferously. Company officials admitted that the company was trying to see how much it could charge for an item before buyers balked. Amazon was caught attempting

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An ad campaign by Suave shampoo asked television viewers to identify the heads of hair of women who used Suave shampoo and conditioner and those that used the much more expensive salon hair-care products. The idea of the ad was that no one could tell which woman used the much cheaper Suave brand. By making price its selling point, Suave is most likely using

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________ = (Unit price × Quantity sold) − Total cost.

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Odd-even pricing is considered to be a ________ approach to pricing.

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Creative Quilts Studio sells hundreds of colors and types of fabric and thread. To price its inventory, the owners add 50 percent to the cost of each bolt of fabric and every spool of thread. What is this pricing approach called?

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Which of the following statements about the factors that influence demand is true?

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What profit-oriented pricing method is often used because of the difficulty in establishing a benchmark of sales or investment to show how much of a firm's effort is needed to achieve the target?

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  Figure 11-7 -Suppose you are the owner of a picture frame store. Assume that the average price customers are willing to pay for each picture frame is $120. Also, suppose your fixed costs (FC) total $32,000 (real estate taxes, interest on a bank loan, etc.) and unit variable cost (UVC) for a picture frame is $40 (labor, glass, frame, and matting). According to Figure 11-7a above, how much profit will your picture frame store make if it sells 400 picture frames? Figure 11-7 -Suppose you are the owner of a picture frame store. Assume that the average price customers are willing to pay for each picture frame is $120. Also, suppose your fixed costs (FC) total $32,000 (real estate taxes, interest on a bank loan, etc.) and unit variable cost (UVC) for a picture frame is $40 (labor, glass, frame, and matting). According to Figure 11-7a above, how much profit will your picture frame store make if it sells 400 picture frames?

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Which of the following statements regarding a trade-in allowance is most accurate?

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Setting one price for all buyers of a product or service is referred to as

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