Question 1

For most consumers, there is an assumed relationship between

Accepted Answer

A)  price and quality. 
B)  value and cost. 
C)  internal and external reference prices. 
D)  value and price consciousness. 
E)  prestige prices and value. 
A)  price and quality. 
B)  value and cost. 
C)  internal and external reference prices. 
D)  value and price consciousness. 
E)  prestige prices and value.

Question 2

Which of the following statements about price elasticity is false?

Accepted Answer

A)  Steak is an example of a product that has an elastic demand for most people, because when price goes up quantity demanded goes down proportionally. 
B)  Elasticity of demand is the relative responsiveness of a change in quantity demanded to changes in price. 
C)  If marketers can determine price elasticity, then setting prices at optimum levels is much easier. 
D)  When price is raised on a product that has an inelastic demand, then total revenue will decrease. 
E)  A product like electricity has an inelastic demand. 
A)  Steak is an example of a product that has an elastic demand for most people, because when price goes up quantity demanded goes down proportionally. 
B)  Elasticity of demand is the relative responsiveness of a change in quantity demanded to changes in price. 
C)  If marketers can determine price elasticity, then setting prices at optimum levels is much easier. 
D)  When price is raised on a product that has an inelastic demand, then total revenue will decrease. 
E)  A product like electricity has an inelastic demand.

Question 3

Marginal analysis involves examining

Accepted Answer

A)  what happens to a firm's costs and revenues when production is changed by one unit. 
B)  what happens to a firm's revenues when one more product is sold. 
C)  what happens to a firm's costs when one more unit is produced. 
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)  what happens to a firm's revenues when one more product is sold. 
C)  what happens to a firm's costs when one more unit is produced. 
D)  the difference between marginal revenue and total revenue. 
E)  the difference between marginal cost and total cost.

Question 4

If a retailer orders a quantity of merchandise to be delivered to his store in Phoenix and is quoted a price that does not include shipping charges, the retailer is paying a(n) ____ price.

Accepted Answer

A)  F.O.b. destination 
B)  F.O.b. factory 
C)  transfer 
D)  postage-stamp 
E)  base-point 
A)  F.O.b. destination 
B)  F.O.b. factory 
C)  transfer 
D)  postage-stamp 
E)  base-point

Question 5

Scenario 19.2 Use the following to answer the questions.
The BASF Chemical Company in Germany has developed a new rubberized coating. The product has an application for cell phones and other hand-held electronic devices that gives them protection from falls and scratches. BASF plans to market the product directly to businesses that manufacture the casings for these types of products. BASF currently uses a system of salespeople headquartered in Germany, while its primary business customers are in China.
Refer to Scenario 19.2. BASF is considering the problem of actual distance in delivering its product from the plant in Germany to some of its customers in China. Which pricing strategy would help overcome this problem?

Accepted Answer

A)  Geographic 
B)  Transfer 
C)  Commercial 
D)  Transit 
E)  Factory 
A)  Geographic 
B)  Transfer 
C)  Commercial 
D)  Transit 
E)  Factory

Question 6

The major disadvantage of using price competition is that it takes a long time to implement the changes in price.

Accepted Answer

A) True 
 B)False

Question 7

Fixed costs vary with the number of units produced or sold.

Accepted Answer

A) True 
 B)False

Question 8

Ideally, pricing decisions have little relation to a firm's marketing objectives.

Accepted Answer

A) True 
 B)False

Question 9

The point at which marginal revenue equals marginal cost is the breakeven point.

Accepted Answer

A) True 
 B)False

Question 10

Isabella is a product manager for The Container Store, a retailer of plastic bins and other storage containers. Sales have been declining in the past nine months and her management team is pressuring her to compete based on price discounts. However, Isabella is aware of the dangers associated with engaging in price competition. She knows that competitors can also change prices quickly and aggressively, which can result in a(n) ____ that will be harmful to both companies.

Accepted Answer

A)  reduction in cost 
B)  price war 
C)  competitive game 
D)  industry collapse 
E)  advertising battle 
A)  reduction in cost 
B)  price war 
C)  competitive game 
D)  industry collapse 
E)  advertising battle

Question 11

What equation shows organizations the relationship between price and profit?

Accepted Answer

A)  Total Variable Costs + Total Fixed Costs = Sales − Profit 
B)  Price = Profit per Item × Number of Units Sold 
C)  (Price × Quantity Sold) − Total Costs = Profits 
D)  (Price − Profits) × Total Costs = Sales 
E)  Total Costs = (Price × Quantity Sold) − Profits 
A)  Total Variable Costs + Total Fixed Costs = Sales − Profit 
B)  Price = Profit per Item × Number of Units Sold 
C)  (Price × Quantity Sold) − Total Costs = Profits 
D)  (Price − Profits) × Total Costs = Sales 
E)  Total Costs = (Price × Quantity Sold) − Profits

Question 12

Scenario 19.1 Use the following to answer the questions.
Concession Supply sells hotdogs, buns, and nacho ingredients to several major league ballparks across the country. Currently, Concession Supply has the following pricing information for one case of hotdogs sold at Wrigley Field: Total fixed costs = $1,200, Selling price = $16, and Variable costs = $6.
Refer to Scenario 19.1. If Concession Supply wanted to make a profit of $800 on each case, it would need to sell ____ cases.

Accepted Answer

A)  150 
B)  300 
C)  100 
D)  75 
E)  200 
A)  150 
B)  300 
C)  100 
D)  75 
E)  200

Question 13

Marketers have no flexibility in setting prices under conditions of

Accepted Answer

A)  a monopoly. 
B)  an oligopoly. 
C)  perfect competition. 
D)  monopolistic competition. 
E)  no competition. 
A)  a monopoly. 
B)  an oligopoly. 
C)  perfect competition. 
D)  monopolistic competition. 
E)  no competition.

Question 14

A measure of 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 15

Price competition is a very flexible marketing strategy.

Accepted Answer

A) True 
 B)False

Question 16

Markum Industries determines that for its air compressors the following results are achieved at a price of $250: total costs = $250,000; variable costs per unit = $100; fixed costs = $175,000. Given these figures, Markum would break even at ____ units.

Accepted Answer

A)  1,167 
B)  1,000 
C)  1,750 
D)  2,500 
E)  700 
A)  1,167 
B)  1,000 
C)  1,750 
D)  2,500 
E)  700

Question 17

Price is

Accepted Answer

A)  money paid in a transaction. 
B)  not important to buyers. 
C)  of limited interest to sellers. 
D)  the most inflexible marketing mix decision variable. 
E)  the value that is exchanged for products in a marketing transaction. 
A)  money paid in a transaction. 
B)  not important to buyers. 
C)  of limited interest to sellers. 
D)  the most inflexible marketing mix decision variable. 
E)  the value that is exchanged for products in a marketing transaction.

Question 18

Demand is best determined by a top management committee.

Accepted Answer

A) True 
 B)False

Question 19

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 20

____________ are reductions off the list price given by a producer to an intermediary for performing certain functions.

Accepted Answer

A)  Trade discounts 
B)  Quantity discounts 
C)  Cumulative discounts 
D)  Non-cumulative discounts 
E)  Cash discounts 
A)  Trade discounts 
B)  Quantity discounts 
C)  Cumulative discounts 
D)  Non-cumulative discounts 
E)  Cash discounts

For most consumers, there is an assumed relationship between

Which of the following statements about price elasticity is false?

Marginal analysis involves examining

If a retailer orders a quantity of merchandise to be delivered to his store in Phoenix and is quoted a price that does not include shipping charges, the retailer is paying a(n) ____ price.

The major disadvantage of using price competition is that it takes a long time to implement the changes in price.

Fixed costs vary with the number of units produced or sold.

Ideally, pricing decisions have little relation to a firm's marketing objectives.

The point at which marginal revenue equals marginal cost is the breakeven point.

What equation shows organizations the relationship between price and profit?

Marketers have no flexibility in setting prices under conditions of

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

Price competition is a very flexible marketing strategy.

Markum Industries determines that for its air compressors the following results are achieved at a price of $250: total costs = $250,000; variable costs per unit = $100; fixed costs = $175,000. Given these figures, Markum would break even at ____ units.

Price is

Demand is best determined by a top management committee.

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

____________ are reductions off the list price given by a producer to an intermediary for performing certain functions.

An Overview of Strategic Marketing

Planning, Implementing, and Evaluating Marketing Strategies

The Marketing Environment

Social Responsibility and Ethics in Marketing

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 Concepts, Branding, and Packaging

Developing and Managing Products

Services Marketing

Marketing Channels and Supply Chain Management

Retailing, Direct Marketing and Wholesaling

Integrated Marketing Communications

Advertising and Public Relations

Personal Selling and Sales Promotion

Setting Prices

Filters

Exam 19: Pricing Concepts

For most consumers, there is an assumed relationship between

Which of the following statements about price elasticity is false?

Marginal analysis involves examining

If a retailer orders a quantity of merchandise to be delivered to his store in Phoenix and is quoted a price that does not include shipping charges, the retailer is paying a(n) ____ price.

The major disadvantage of using price competition is that it takes a long time to implement the changes in price.

Fixed costs vary with the number of units produced or sold.

Ideally, pricing decisions have little relation to a firm's marketing objectives.

The point at which marginal revenue equals marginal cost is the breakeven point.

What equation shows organizations the relationship between price and profit?

Marketers have no flexibility in setting prices under conditions of

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

Price competition is a very flexible marketing strategy.

Markum Industries determines that for its air compressors the following results are achieved at a price of $250: total costs = $250,000; variable costs per unit = $100; fixed costs = $175,000. Given these figures, Markum would break even at ____ units.

Price is

Demand is best determined by a top management committee.

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

____________ are reductions off the list price given by a producer to an intermediary for performing certain functions.

An Overview of Strategic Marketing

Planning, Implementing, and Evaluating Marketing Strategies

The Marketing Environment

Social Responsibility and Ethics in Marketing

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 Concepts, Branding, and Packaging

Developing and Managing Products

Services Marketing

Marketing Channels and Supply Chain Management

Retailing, Direct Marketing and Wholesaling

Integrated Marketing Communications

Advertising and Public Relations

Personal Selling and Sales Promotion

Setting Prices

Filters