Question 1

When a seller determines the selling price by adding to cost an amount for profit and expenses not previously accounted for,the seller is using _____ pricing.

Accepted Answer

A)  profit maximization 
B)  demand-oriented 
C)  break-even 
D)  target return 
E)  markup 
A)  profit maximization 
B)  demand-oriented 
C)  break-even 
D)  target return 
E)  markup

Question 2

Research has shown that products that are perceived to be of high quality tend to benefit less from price promotions than products perceived to be of lower quality.

Accepted Answer

A) True 
 B)False

Question 3

Adequate distribution for a new product is often obtained by reducing the size of the profit margin for its resellers.

Accepted Answer

A) True 
 B)False

Question 4

The daily demand for bottled water is 35 bottles when the price is set at $1.However,if the price is raised to $5,the demand is only 5 bottles.The bottled water producer is willing to supply 40 bottles if the price is set at $5 per bottle,but will only supply 10 bottles if the price is set at $2.Draw the supply and demand curves for the water bottles on the graph below.Label each curve and each axis.At what level does equilibrium occur? What are the areas of surplus and shortage?

Accepted Answer

@#IMG-DLM& The vertical axis should be labeled as

Question 5

Price should not be used as a promotional tool.

Accepted Answer

A) True 
 B)False

Question 6

A lack of pricing power means that when a company tries to raise its prices,it loses sales volume as customers shift to low cost competitors or find a substitute product.

Accepted Answer

A) True 
 B)False

Question 7

An office supply store can buy a desk for $300.If the store owner sells the desk for $450,what is the markup based on cost?

Accepted Answer

A)  15 percent 
B)  20 percent 
C)  25 percent 
D)  33 percent 
E)  50 percent 
A)  15 percent 
B)  20 percent 
C)  25 percent 
D)  33 percent 
E)  50 percent

Question 8

Profit is the price charged to customers multiplied by the number of units sold.

Accepted Answer

A) True 
 B)False

Question 9

_____ is the quantity of a product that will be offered to the market at various prices for a specified period.

Accepted Answer

A)  Distribution 
B)  Supply 
C)  Price 
D)  Equilibrium 
E)  Elasticity 
A)  Distribution 
B)  Supply 
C)  Price 
D)  Equilibrium 
E)  Elasticity

Question 10

Specialty Cakes
Imagine you're planning an after-symphony fund-raising party,and you need a life-size grand piano cake.Or,you are a developer proposing a new shopping center to a group of investors,and you want to serve a cake shaped like an architectural rendition of the center.Is this impossible? No,you just need to contact Cecilia Villaveces Cakes.She actually built a life-size grand piano for a gala in Macon,Georgia.You can expect to pay anywhere from $75 to $10,000 for one of Cecilia's artistic creations,depending on complexity of design and size.She uses only the best ingredients,and no two cakes are ever quite alike.
-Refer to Specialty Cakes.Which of the following is the BEST example of a fixed cost for Cecilia Villaveces Cakes?

Accepted Answer

A)  Eggs,butter,sugar 
B)  Delivery costs 
C)  Part-time employees 
D)  Electricity consumption 
E)  Food preparation licenses 
A)  Eggs,butter,sugar 
B)  Delivery costs 
C)  Part-time employees 
D)  Electricity consumption 
E)  Food preparation licenses

Question 11

If the formula for elasticity results in a measure of elasticity (E)greater than 1,demand is said to be inelastic.

Accepted Answer

A) True 
 B)False

Question 12

The two types of costs a marketer needs to consider when setting prices are:

Accepted Answer

A)  primary and secondary 
B)  variable and fixed 
C)  marginal and absolute 
D)  short-term and long-term 
E)  elastic and inelastic 
A)  primary and secondary 
B)  variable and fixed 
C)  marginal and absolute 
D)  short-term and long-term 
E)  elastic and inelastic

Question 13

Define elasticity of demand and compare and contrast the three types of demand: elastic,inelastic,and unitary.What would the demand curve for elastic and inelastic demand look like when graphed?

Accepted Answer

Elasticity of demand refers to consumers

Question 14

When goods and services are exchanged,the trade is called:

Accepted Answer

A)  exchange 
B)  substitution 
C)  barter 
D)  swap 
E)  bargaining 
A)  exchange 
B)  substitution 
C)  barter 
D)  swap 
E)  bargaining

Question 15

Today's firms must develop specific,measurable,and attainable pricing objectives if they hope to survive in highly competitive markets.

Accepted Answer

A) True 
 B)False

Question 16

Yield management systems are used to:

Accepted Answer

A)  determine the availability of product substitutes in complex industries that are experiencing rapid change 
B)  profitably fill unused capacity 
C)  predict necessary service levels to achieve revenue goals 
D)  determine whether it is financially more feasible to buy a new product or repair a broken one 
E)  create elastic demand for low-involvement products 
A)  determine the availability of product substitutes in complex industries that are experiencing rapid change 
B)  profitably fill unused capacity 
C)  predict necessary service levels to achieve revenue goals 
D)  determine whether it is financially more feasible to buy a new product or repair a broken one 
E)  create elastic demand for low-involvement products

Question 17

The point at which marginal cost and marginal revenue are equal always results in:

Accepted Answer

A)  maximization of elasticity 
B)  maximization of revenue 
C)  maximization of costs 
D)  maximization of profits 
E)  break-even equilibrium 
A)  maximization of elasticity 
B)  maximization of revenue 
C)  maximization of costs 
D)  maximization of profits 
E)  break-even equilibrium

Question 18

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 total fixed costs are $23,400,000 and the average variable costs is $50,500,how many Roadsters must Tesla sell to break-even?

Accepted Answer

A)  130 
B)  182 
C)  250 
D)  300 
E)  463 
A)  130 
B)  182 
C)  250 
D)  300 
E)  463

Question 19

List the three categories of pricing objectives and then two specific strategies in each category that a marketer could implement to achieve those objectives.

Accepted Answer

PROFIT-ORIENTED PRICING OBJECTIVES inclu

Question 20

When Apple Inc.developed and introduced the iPhone it was unique as it essentially combined a cellular phone with an iPod,an Internet browser,and email capabilities.As such,in the short run it seemed that demand for the product would be inelastic,with no real existing competition.The recommend pricing strategy in such a situation would be:

Accepted Answer

A)  low initial price,rising slightly when entering the growth stage 
B)  high initial price,falling slightly when entering the growth stage 
C)  high price,continuing through growth and maturity 
D)  low price,continuing through growth and maturity 
E)  low price initially,rising constantly through growth and into maturity 
A)  low initial price,rising slightly when entering the growth stage 
B)  high initial price,falling slightly when entering the growth stage 
C)  high price,continuing through growth and maturity 
D)  low price,continuing through growth and maturity 
E)  low price initially,rising constantly through growth and into maturity

When a seller determines the selling price by adding to cost an amount for profit and expenses not previously accounted for,the seller is using _____ pricing.

Research has shown that products that are perceived to be of high quality tend to benefit less from price promotions than products perceived to be of lower quality.

Adequate distribution for a new product is often obtained by reducing the size of the profit margin for its resellers.

Price should not be used as a promotional tool.

A lack of pricing power means that when a company tries to raise its prices,it loses sales volume as customers shift to low cost competitors or find a substitute product.

An office supply store can buy a desk for $300.If the store owner sells the desk for $450,what is the markup based on cost?

Profit is the price charged to customers multiplied by the number of units sold.

_____ is the quantity of a product that will be offered to the market at various prices for a specified period.

If the formula for elasticity results in a measure of elasticity (E)greater than 1,demand is said to be inelastic.

The two types of costs a marketer needs to consider when setting prices are:

Define elasticity of demand and compare and contrast the three types of demand: elastic,inelastic,and unitary.What would the demand curve for elastic and inelastic demand look like when graphed?

When goods and services are exchanged,the trade is called:

Today's firms must develop specific,measurable,and attainable pricing objectives if they hope to survive in highly competitive markets.

Yield management systems are used to:

The point at which marginal cost and marginal revenue are equal always results in:

List the three categories of pricing objectives and then two specific strategies in each category that a marketer could implement to achieve those objectives.

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

When a seller determines the selling price by adding to cost an amount for profit and expenses not previously accounted for,the seller is using _____ pricing.

Research has shown that products that are perceived to be of high quality tend to benefit less from price promotions than products perceived to be of lower quality.

Adequate distribution for a new product is often obtained by reducing the size of the profit margin for its resellers.

Price should not be used as a promotional tool.

A lack of pricing power means that when a company tries to raise its prices,it loses sales volume as customers shift to low cost competitors or find a substitute product.

An office supply store can buy a desk for $300.If the store owner sells the desk for $450,what is the markup based on cost?

Profit is the price charged to customers multiplied by the number of units sold.

_____ is the quantity of a product that will be offered to the market at various prices for a specified period.

If the formula for elasticity results in a measure of elasticity (E)greater than 1,demand is said to be inelastic.

The two types of costs a marketer needs to consider when setting prices are:

Define elasticity of demand and compare and contrast the three types of demand: elastic,inelastic,and unitary.What would the demand curve for elastic and inelastic demand look like when graphed?

When goods and services are exchanged,the trade is called:

Today's firms must develop specific,measurable,and attainable pricing objectives if they hope to survive in highly competitive markets.

Yield management systems are used to:

The point at which marginal cost and marginal revenue are equal always results in:

List the three categories of pricing objectives and then two specific strategies in each category that a marketer could implement to achieve those objectives.

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