Question 1

Factors that determine consumers' willingness and ability to pay for products and services are referred to as

Accepted Answer

A)  supply factors. 
B)  demand factors. 
C)  affordability factors. 
D)  elasticity factors. 
E)  macro environmental factors. 
A)  supply factors. 
B)  demand factors. 
C)  affordability factors. 
D)  elasticity factors. 
E)  macro environmental factors.

Question 2

Predatory pricing is

Accepted Answer

A)  most effective in the growth stage of the product life cycle. 
B)  a popular technique preferred by online businesses. 
C)  illegal but often difficult to prosecute. 
D)  most effective in business-to-business marketing. 
E)  one of the most widely used pricing practices for professional marketers. 
A)  most effective in the growth stage of the product life cycle. 
B)  a popular technique preferred by online businesses. 
C)  illegal but often difficult to prosecute. 
D)  most effective in business-to-business marketing. 
E)  one of the most widely used pricing practices for professional marketers.

Question 3

A demand curve graph typically appears as

Accepted Answer

A)  a parabola with the apex representing the highest price that can be charged without losing customers. 
B)  a diagonal line going from upper left to lower right demonstrating that as price goes down, demand goes up. 
C)  an inverted parabola with the lowest point representing the lowest price that can be charged and still meet the company's profit objectives. 
D)  a diagonal line going from lower left to upper right demonstrating that as prices go up, demand goes up proportionately. 
E)  two intersecting lines that identify the point at which supply and demand are exactly the same. 
A)  a parabola with the apex representing the highest price that can be charged without losing customers. 
B)  a diagonal line going from upper left to lower right demonstrating that as price goes down, demand goes up. 
C)  an inverted parabola with the lowest point representing the lowest price that can be charged and still meet the company's profit objectives. 
D)  a diagonal line going from lower left to upper right demonstrating that as prices go up, demand goes up proportionately. 
E)  two intersecting lines that identify the point at which supply and demand are exactly the same.

Question 4

When you buy a used car from a CarMax dealership, you are offered the car at a "no haggle" price. You can buy it or not, but there is no negotiating the published price because of the seller's

Accepted Answer

A)  customary pricing strategy. 
B)  one-price policy. 
C)  uniform pricing policy. 
D)  dynamic pricing policy. 
E)  dynamic pricing strategy. 
A)  customary pricing strategy. 
B)  one-price policy. 
C)  uniform pricing policy. 
D)  dynamic pricing policy. 
E)  dynamic pricing strategy.

Question 5

The largest US-based TV maker is

Accepted Answer

A)  Sharp. 
B)  Panasonic. 
C)  LG. 
D)  Sony. 
E)  VIZIO. 
A)  Sharp. 
B)  Panasonic. 
C)  LG. 
D)  Sony. 
E)  VIZIO.

Question 6

Which of the following is a typical example of a fixed cost?

Accepted Answer

A)  taxes 
B)  raw materials 
C)  sales commissions 
D)  executive salaries 
E)  hourly wages 
A)  taxes 
B)  raw materials 
C)  sales commissions 
D)  executive salaries 
E)  hourly wages

Question 7

VIZIO is the market leader in the North American ________ market.

Accepted Answer

A)  designer eyewear 
B)  virtual media 
C)  smart TV 
D)  3-D video game 
E)  exotic travel 
A)  designer eyewear 
B)  virtual media 
C)  smart TV 
D)  3-D video game 
E)  exotic travel

Question 8

The formula Total revenue − Total cost, or [(Unit price × Quantity sold) − (Fixed cost + Variable cost)], represents

Accepted Answer

A)  the value equation. 
B)  the sales ratio. 
C)  average revenue. 
D)  the break-even point. 
E)  the profit equation. 
A)  the value equation. 
B)  the sales ratio. 
C)  average revenue. 
D)  the break-even point. 
E)  the profit equation.

Question 9

When is skimming pricing an effective strategy?

Accepted Answer

Skimming pricing is an effective strateg

Question 10

There are several factors that predict when a skimming pricing policy is likely to be most effective, including situations in which

Accepted Answer

A)  consumers tend to be price-sensitive. 
B)  enough prospective customers are willing to buy immediately at a high initial price to make these sales profitable. 
C)  leadership is expecting to meet high sales unit goals. 
D)  a lower price will significantly reduce unit costs. 
E)  consumers perceive your product to be similar to other products in the market. 
A)  consumers tend to be price-sensitive. 
B)  enough prospective customers are willing to buy immediately at a high initial price to make these sales profitable. 
C)  leadership is expecting to meet high sales unit goals. 
D)  a lower price will significantly reduce unit costs. 
E)  consumers perceive your product to be similar to other products in the market.

Question 11

The unit variable cost (UVC) equals variable cost (VC) divided by

Accepted Answer

A)  quantity (Q). 
B)  fixed costs (F
C) . 
C)  total cost (T
C) . 
D)  total revenue (TR). 
E)  price per unit of the product (P). 
A)  quantity (Q). 
B)  fixed costs (F
C) . 
C)  total cost (T
C) . 
D)  total revenue (TR). 
E)  price per unit of the product (P).

Question 12

Predatory pricing is

Accepted Answer

A)  an arrangement a manufacturer makes with a reseller to handle only its products and not those of a competitor. 
B)  the practice of charging different prices to different buyers for goods of like grade and quality. 
C)  the practice of charging a very low price for a product with the intent of driving competitors out of business. 
D)  a conspiracy among firms to set prices for a product or service. 
E)  a seller's requirement that the purchaser of one product must also buy another product in the line. 
A)  an arrangement a manufacturer makes with a reseller to handle only its products and not those of a competitor. 
B)  the practice of charging different prices to different buyers for goods of like grade and quality. 
C)  the practice of charging a very low price for a product with the intent of driving competitors out of business. 
D)  a conspiracy among firms to set prices for a product or service. 
E)  a seller's requirement that the purchaser of one product must also buy another product in the line.

Question 13

Figure 11-3a
-Figure 11-3a above shows that when the price for Red Baron frozen cheese pizzas moves from $8 to $6 per unit along the demand curve D1, the quantity demanded

Accepted Answer

A)  increases from 2 to 3 million units per year. 
B)  decreases from 3 to 2 million units per year. 
C)  stays the same. 
D)  increases from 6 to 8 million units per year. 
E)  decreases from 8 to 6 million units per year. 
A)  increases from 2 to 3 million units per year. 
B)  decreases from 3 to 2 million units per year. 
C)  stays the same. 
D)  increases from 6 to 8 million units per year. 
E)  decreases from 8 to 6 million units per year.

Question 14

Target return-on-investment pricing refers to

Accepted Answer

A)  setting a price to achieve an annual target ROA. 
B)  adding a fixed percentage to the cost of all items in a specific product class. 
C)  setting prices to achieve a profit that is a specified percentage of the sales volume. 
D)  setting a price to achieve an annual target ROI. 
E)  setting a price based on an annual specific dollar target volume of profit. 
A)  setting a price to achieve an annual target ROA. 
B)  adding a fixed percentage to the cost of all items in a specific product class. 
C)  setting prices to achieve a profit that is a specified percentage of the sales volume. 
D)  setting a price to achieve an annual target ROI. 
E)  setting a price based on an annual specific dollar target volume of profit.

Question 15

The break-even point (BEP) = [Fixed cost ÷ (________ − Unit variable cost)].

Accepted Answer

A)  Total cost 
B)  Total expense 
C)  Fixed cost 
D)  Unit variable cost 
E)  Unit price 
A)  Total cost 
B)  Total expense 
C)  Fixed cost 
D)  Unit variable cost 
E)  Unit price

Question 16

Figure 11-6a
-Suppose you are the owner of a picture frame store and you wish to calculate how many frames you must sell to cover your fixed and variable costs at a given price. Let's assume that the demand for your frames is strong, so 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). If your picture frame store sold 2,000 picture frames, what would your profit (or loss) be?

Accepted Answer

A)  −$32,000 
B)  $0 
C)  $32,000 
D)  $112,000 
E)  $128,000 
A)  −$32,000 
B)  $0 
C)  $32,000 
D)  $112,000 
E)  $128,000

Question 17

The owner of a store that sells custom kitchen cabinets wishes to use a target return-on-sales pricing approach to establish a price for a typical section of cabinets. Assume that variable costs total $200 per unit, fixed cost is $44,000, and the storeowner desires a target profit of 20 percent return on sales at an annual volume of 400 cabinets. What price should be charged for a typical cabinet section?

Accepted Answer

A)  $263.50 
B)  $311.00 
C)  $387.50 
D)  $445.50 
E)  $775.00 
A)  $263.50 
B)  $311.00 
C)  $387.50 
D)  $445.50 
E)  $775.00

Question 18

All of the following are demand factors except which?

Accepted Answer

A)  the price of similar products 
B)  consumer tastes 
C)  consumer income 
D)  the availability of similar products 
E)  the number of products in the line 
A)  the price of similar products 
B)  consumer tastes 
C)  consumer income 
D)  the availability of similar products 
E)  the number of products in the line

Question 19

The vertical axis of a demand curve graph represents

Accepted Answer

A)  market growth rate. 
B)  relative market share. 
C)  price per unit. 
D)  potential profit in dollars. 
E)  quantity demanded. 
A)  market growth rate. 
B)  relative market share. 
C)  price per unit. 
D)  potential profit in dollars. 
E)  quantity demanded.

Question 20

Price elasticity of demand measures how sensitive consumer demand and the firm's revenues are to changes in the product's price. Explain the difference between a product with elastic demand and a product with inelastic demand.

Accepted Answer

Elastic demand exists when a 1 percent d

Factors that determine consumers' willingness and ability to pay for products and services are referred to as

Predatory pricing is

A demand curve graph typically appears as

When you buy a used car from a CarMax dealership, you are offered the car at a "no haggle" price. You can buy it or not, but there is no negotiating the published price because of the seller's

The largest US-based TV maker is

Which of the following is a typical example of a fixed cost?

VIZIO is the market leader in the North American ________ market.

The formula Total revenue − Total cost, or [(Unit price × Quantity sold) − (Fixed cost + Variable cost)], represents

When is skimming pricing an effective strategy?

There are several factors that predict when a skimming pricing policy is likely to be most effective, including situations in which

The unit variable cost (UVC) equals variable cost (VC) divided by

Predatory pricing is

Figure 11-3a -Figure 11-3a above shows that when the price for Red Baron frozen cheese pizzas moves from $8 to $6 per unit along the demand curve D1, the quantity demanded

Target return-on-investment pricing refers to

The break-even point (BEP) = [Fixed cost ÷ (________ − Unit variable cost)].

All of the following are demand factors except which?

The vertical axis of a demand curve graph represents

Price elasticity of demand measures how sensitive consumer demand and the firm's revenues are to changes in the product's price. Explain the difference between a product with elastic demand and a product with inelastic demand.

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

Exam 11: Pricing Products and Services

Factors that determine consumers' willingness and ability to pay for products and services are referred to as

Predatory pricing is

A demand curve graph typically appears as

When you buy a used car from a CarMax dealership, you are offered the car at a "no haggle" price. You can buy it or not, but there is no negotiating the published price because of the seller's

The largest US-based TV maker is

Which of the following is a typical example of a fixed cost?

VIZIO is the market leader in the North American ________ market.

The formula Total revenue − Total cost, or [(Unit price × Quantity sold) − (Fixed cost + Variable cost)], represents

When is skimming pricing an effective strategy?

There are several factors that predict when a skimming pricing policy is likely to be most effective, including situations in which

The unit variable cost (UVC) equals variable cost (VC) divided by

Predatory pricing is

Figure 11-3a -Figure 11-3a above shows that when the price for Red Baron frozen cheese pizzas moves from $8 to $6 per unit along the demand curve D1, the quantity demanded

Target return-on-investment pricing refers to

The break-even point (BEP) = [Fixed cost ÷ (________ − Unit variable cost)].

All of the following are demand factors except which?

The vertical axis of a demand curve graph represents

Price elasticity of demand measures how sensitive consumer demand and the firm's revenues are to changes in the product's price. Explain the difference between a product with elastic demand and a product with inelastic demand.

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