Question 1

Although many factors can influence price,the primary determinants are:

Accepted Answer

A)  costs of manufacturing and distribution 
B)  the demand for the good and the cost to the seller 
C)  demand by the consumer and perceived quality 
D)  distribution and promotion strategies 
E)  stage of the product life cycle and costs to the consumer 
A)  costs of manufacturing and distribution 
B)  the demand for the good and the cost to the seller 
C)  demand by the consumer and perceived quality 
D)  distribution and promotion strategies 
E)  stage of the product life cycle and costs to the consumer

Question 2

Tesla Motors
"Going green" doesn't have to be boring.The Tesla Roadster Sport is an electric car that goes from 0 to 60 in four seconds and drives more like a race car than an environmentally-friendly ride.But that level of performance will set you back $128,500.As of 2009,Silicon Valley-based Tesla Motors,Inc.was the only company offering highway-compatible electric cars.Most Roadster Sport buyers are car enthusiasts and are buying them for the "fun toy" aspect of having an electric car rather than for environmental reasons.
-Refer to Tesla Motors.If Tesla had assets of $5 million and net profits after taxes of $550,000,what is Tesla's return on investment (ROI)?

Accepted Answer

A)  1 percent 
B)  9 percent 
C)  11 percent 
D)  $14,135 
E)  $4,450,000 
A)  1 percent 
B)  9 percent 
C)  11 percent 
D)  $14,135 
E)  $4,450,000

Question 3

Shopping bots:

Accepted Answer

A)  encourage a more creative use of advertising 
B)  link manufacturers,suppliers,and customers 
C)  create opportunities for prestige pricing 
D)  provide a means for comparison shopping 
E)  create inelastic demand 
A)  encourage a more creative use of advertising 
B)  link manufacturers,suppliers,and customers 
C)  create opportunities for prestige pricing 
D)  provide a means for comparison shopping 
E)  create inelastic demand

Question 4

Which of the following statements describes an advantage of status quo pricing?

Accepted Answer

A)  Status quo pricing is derived from actual costs of manufacturing. 
B)  Status quo pricing maintains the organization's differential advantage. 
C)  Status quo pricing is active,not reactive. 
D)  Status quo pricing causes price wars. 
E)  Status quo pricing requires little planning. 
A)  Status quo pricing is derived from actual costs of manufacturing. 
B)  Status quo pricing maintains the organization's differential advantage. 
C)  Status quo pricing is active,not reactive. 
D)  Status quo pricing causes price wars. 
E)  Status quo pricing requires little planning.

Question 5

At the end of the summer,the Bloomin' Garden Center reduced the price on all of its plants,fertilizer,and potting soil by 50 percent in order to liquidate this inventory.What type of pricing strategy is being used in this example?

Accepted Answer

A)  supply oriented 
B)  sales maximization 
C)  target return on investment 
D)  satisfactory profit 
E)  profit maximization 
A)  supply oriented 
B)  sales maximization 
C)  target return on investment 
D)  satisfactory profit 
E)  profit maximization

Question 6

As products enter the growth stage of the product life cycle,prices generally begin to stabilize.

Accepted Answer

A) True 
 B)False

Question 7

An organization is using _____ when it sets its prices so that total revenue is as large as possible relative to total costs.

Accepted Answer

A)  profit maximization 
B)  market share pricing 
C)  demand-oriented pricing 
D)  sales maximization 
E)  status quo pricing 
A)  profit maximization 
B)  market share pricing 
C)  demand-oriented pricing 
D)  sales maximization 
E)  status quo pricing

Question 8

Smelly Fruit
At first glance there is little to like about the durian.The durian is a fruit popular in Thailand that is spiky outside and stinky on the inside.When confronted with the durian for the first time,the Wall Street Journal recently reported that westerners often describe its distinctive sulphurous smell with words like stinky socks and manure.However,the durian is so popular in Thailand that one variety of the durian fruit,called the Kan Yao,has been selling for as high as $200.Even at that price,supply of the Kan Yao cannot keep up with demand.There are approximately 30 varieties of the durian grown in Thailand,with the most plentiful selling in the $15 range.The yellow flesh of the durian,the part you eat,has very powerful smell,but possesses a sweet,nutty taste that Thais cannot seem to get enough of at any price.
-Refer to Smelly Fruit.Suppose you have decided to buy land in Thailand and become a durian producer.You see that the customary price for a Kan Yao is $200,so that is the price you decide to charge for your durian crop.This suggests you are using a _____ approach to setting your price.

Accepted Answer

A)  profit maximization 
B)  market share 
C)  return on investment (ROI) 
D)  sales maximization 
E)  status quo 
A)  profit maximization 
B)  market share 
C)  return on investment (ROI) 
D)  sales maximization 
E)  status quo

Question 9

Price is defined as the perceived value of a good or service that is exchanged for a certain dollar amount.

Accepted Answer

A) True 
 B)False

Question 10

Revenue:

Accepted Answer

A)  equals quantity sold times profit margin 
B)  equals price minus costs 
C)  equals return on investment 
D)  is synonymous with profit 
E)  equals price of goods times quantity sold 
A)  equals quantity sold times profit margin 
B)  equals price minus costs 
C)  equals return on investment 
D)  is synonymous with profit 
E)  equals price of goods times quantity sold

Question 11

Laurie knows little about cooking and does not want to spend the time to learn how to make a quiche.However,she has been asked to bring a quiche to an office retirement party.Not wanting to make a poor choice,she is likely to:

Accepted Answer

A)  intuitively make the right choice 
B)  avoid making a decision by not attending the party 
C)  buy the most expensive pre-made quiche (perhaps paying too much),guessing that the price is related to quality 
D)  research the product and buy the least expensive frozen quiche she can find 
E)  buy the least expensive frozen quiche because most consumers feel that price is not directly related to quality 
A)  intuitively make the right choice 
B)  avoid making a decision by not attending the party 
C)  buy the most expensive pre-made quiche (perhaps paying too much),guessing that the price is related to quality 
D)  research the product and buy the least expensive frozen quiche she can find 
E)  buy the least expensive frozen quiche because most consumers feel that price is not directly related to quality

Question 12

Many consumers,especially when faced with an uncertain purchase decision,think that a high price:

Accepted Answer

A)  is a signal of quality 
B)  is an indication that consumers are being ripped off 
C)  will always lead to major price discounts to wholesalers and retailers that distribute it 
D)  is a sign of the company's overall market share 
E)  indicates that the brand was slipping into the decline stage of the product life cycle but has had a sudden resurgence of growth 
A)  is a signal of quality 
B)  is an indication that consumers are being ripped off 
C)  will always lead to major price discounts to wholesalers and retailers that distribute it 
D)  is a sign of the company's overall market share 
E)  indicates that the brand was slipping into the decline stage of the product life cycle but has had a sudden resurgence of growth

Question 13

Pierre's Ice Cream Company produces ultra-rich ice cream,which it sells in the Cleveland,Ohio area.Last year,it managed to exceed its target return on investment (ROI)for the current fiscal year.The following results were found on its financial statements:
$\begin{array}{lrll}
\text { Gross Revenues: } & \$ 250,000 & \text { Total Assets: } & \$ 500,000 \
\text { Gross Profits: } & \$ 100,000 & \text { Total Liabilities: } & \$ 200,000 \
\text { Net Profits after Tax: } & \$ 50,000 & \text { Owner's Equity: } & \$ 300,000
\end{array}$
What was the actual ROI for Pierre's Ice Cream Company?

Accepted Answer

A)  6.67 percent 
B)  10 percent 
C)  22 percent 
D)  28 percent 
E)  100 percent 
A)  6.67 percent 
B)  10 percent 
C)  22 percent 
D)  28 percent 
E)  100 percent

Question 14

Calculate answers for the following scenarios if retailer markups are based on their selling price:
a)A retailer sells a set of measuring cups for $2.50 after adding $.50 to the original cost. What is the markup percentage?
b)The cost of a food blender for the retailer is $40 and the retailer applies a markup of $60. What is the retail markup percentage?
c)A retailer marks up all products by 20 percent. If a set of glasses costs the retailer $10, what will the final selling price be?
d)A retailer marks up all products by 75 percent. If the selling price of a set of plastic bowls is $4, what was the cost to the retailer?

Accepted Answer

The dollar markup is calculated as selli

Question 15

When Jerry took delivery of his brand new (and very expensive)Jaguar automobile,he was filled with pleasure and excitement.This is an example of the _____ effect associated with the price-quality relationship.

Accepted Answer

A)  durability 
B)  allocative 
C)  prestige 
D)  hedonistic 
E)  performance 
A)  durability 
B)  allocative 
C)  prestige 
D)  hedonistic 
E)  performance

Question 16

_____ is equal to net profit after taxes divided by total assets.

Accepted Answer

A)  Return on investment 
B)  Economic order quantity 
C)  Target-on-sales 
D)  Retained earnings 
E)  Efficiency maximization 
A)  Return on investment 
B)  Economic order quantity 
C)  Target-on-sales 
D)  Retained earnings 
E)  Efficiency maximization

Question 17

Break-even analysis determines what sales volume must be reached for a product before the company's total revenue equals total costs.

Accepted Answer

A) True 
 B)False

Question 18

Market share is a company's product sales as a percentage of its total sales for that industry.

Accepted Answer

A) True 
 B)False

Question 19

Price is best described as:

Accepted Answer

A)  that which is given up in exchange to acquire a good or service 
B)  money exchanged for a good or service 
C)  the psychological results of purchasing 
D)  the cost in dollars for a good or service as set by the producer 
E)  the value of a barter good in an exchange 
A)  that which is given up in exchange to acquire a good or service 
B)  money exchanged for a good or service 
C)  the psychological results of purchasing 
D)  the cost in dollars for a good or service as set by the producer 
E)  the value of a barter good in an exchange

Question 20

Profit maximization is the price at which supply and demand are equal,and there is no inclination for prices to rise or fall.

Accepted Answer

A) True 
 B)False

Although many factors can influence price,the primary determinants are:

Shopping bots:

Which of the following statements describes an advantage of status quo pricing?

At the end of the summer,the Bloomin' Garden Center reduced the price on all of its plants,fertilizer,and potting soil by 50 percent in order to liquidate this inventory.What type of pricing strategy is being used in this example?

As products enter the growth stage of the product life cycle,prices generally begin to stabilize.

An organization is using _____ when it sets its prices so that total revenue is as large as possible relative to total costs.

Price is defined as the perceived value of a good or service that is exchanged for a certain dollar amount.

Revenue:

Laurie knows little about cooking and does not want to spend the time to learn how to make a quiche.However,she has been asked to bring a quiche to an office retirement party.Not wanting to make a poor choice,she is likely to:

Many consumers,especially when faced with an uncertain purchase decision,think that a high price:

When Jerry took delivery of his brand new (and very expensive)Jaguar automobile,he was filled with pleasure and excitement.This is an example of the _____ effect associated with the price-quality relationship.

_____ is equal to net profit after taxes divided by total assets.

Break-even analysis determines what sales volume must be reached for a product before the company's total revenue equals total costs.

Market share is a company's product sales as a percentage of its total sales for that industry.

Price is best described as:

Profit maximization is the price at which supply and demand are equal,and there is no inclination for prices to rise or fall.

An Overview of Marketing

Strategic Planning for Competitive Advantage

Ethics and Social Responsibility

The Marketing Environment

Developing a Global Vision

Consumer Decision Making

Business Marketing

Segmenting and Targeting Markets

Decision Support Systems and Marketing Research

Product Decisions

Developing and Managing Products

Services and Nonprofit Organization Marketing

Marketing Channels

Supply Chain Management

Retailing

Promotional Planning for Competitive Advantage

Advertising and Public Relations

Sales Promotion and Personal Selling

Setting the Right Price

Customer Relationship Management (CRM)

Social Media and Marketing

Filters

Exam 19: Pricing Concepts

Although many factors can influence price,the primary determinants are:

Shopping bots:

Which of the following statements describes an advantage of status quo pricing?

At the end of the summer,the Bloomin' Garden Center reduced the price on all of its plants,fertilizer,and potting soil by 50 percent in order to liquidate this inventory.What type of pricing strategy is being used in this example?

As products enter the growth stage of the product life cycle,prices generally begin to stabilize.

An organization is using _____ when it sets its prices so that total revenue is as large as possible relative to total costs.

Price is defined as the perceived value of a good or service that is exchanged for a certain dollar amount.

Revenue:

Laurie knows little about cooking and does not want to spend the time to learn how to make a quiche.However,she has been asked to bring a quiche to an office retirement party.Not wanting to make a poor choice,she is likely to:

Many consumers,especially when faced with an uncertain purchase decision,think that a high price:

When Jerry took delivery of his brand new (and very expensive)Jaguar automobile,he was filled with pleasure and excitement.This is an example of the _____ effect associated with the price-quality relationship.

_____ is equal to net profit after taxes divided by total assets.

Break-even analysis determines what sales volume must be reached for a product before the company's total revenue equals total costs.

Market share is a company's product sales as a percentage of its total sales for that industry.

Price is best described as:

Profit maximization is the price at which supply and demand are equal,and there is no inclination for prices to rise or fall.

An Overview of Marketing

Strategic Planning for Competitive Advantage

Ethics and Social Responsibility

The Marketing Environment

Developing a Global Vision

Consumer Decision Making

Business Marketing

Segmenting and Targeting Markets

Decision Support Systems and Marketing Research

Product Decisions

Developing and Managing Products

Services and Nonprofit Organization Marketing

Marketing Channels

Supply Chain Management

Retailing

Promotional Planning for Competitive Advantage

Advertising and Public Relations

Sales Promotion and Personal Selling

Setting the Right Price

Customer Relationship Management (CRM)

Social Media and Marketing

Filters