Question 1

_____ occurs when an increase in sales exactly offsets a decrease in price so that total revenue remains exactly the same.

Accepted Answer

A)  Inelastic demand 
B)  Functional elasticity of demand 
C)  Unitary elasticity 
D)  Highly elastic demand 
E)  Fixed elasticity 
A)  Inelastic demand 
B)  Functional elasticity of demand 
C)  Unitary elasticity 
D)  Highly elastic demand 
E)  Fixed elasticity

Question 2

Maximization of cash should be a long-term objective.

Accepted Answer

A) True 
 B)False

Question 3

What happens when demand is elastic?

Accepted Answer

A)  As price goes up,revenue goes down. 
B)  As price goes down,revenue goes down. 
C)  As price goes up,revenue goes up. 
D)  As price goes up,revenue does not change. 
E)  As price goes down,revenue does not change. 
A)  As price goes up,revenue goes down. 
B)  As price goes down,revenue goes down. 
C)  As price goes up,revenue goes up. 
D)  As price goes up,revenue does not change. 
E)  As price goes down,revenue does not change.

Question 4

All of the following factors directly affect the elasticity of demand EXCEPT:

Accepted Answer

A)  other uses of a product 
B)  inputs needed to manufacture the product 
C)  availability of substitute goods 
D)  price relative to a consumer's purchasing power 
E)  product durability 
A)  other uses of a product 
B)  inputs needed to manufacture the product 
C)  availability of substitute goods 
D)  price relative to a consumer's purchasing power 
E)  product durability

Question 5

Research indicates that when a country's inflation rate is high,demand becomes more elastic.

Accepted Answer

A) True 
 B)False

Question 6

American Girl Doll
The American Girl catalog began as a concept to introduce today's girls to girls who lived in the past.Each historically accurate doll is carefully crafted and dressed and has books to describe her life.For example,Kristen is an 1854 pioneer girl who is growing up in Minnesota.Her story begins with her long sea voyage from Sweden.The basic doll dressed in a calico dress and striped apron plus the hardcover story of how she got to Minnesota costs $90.Six more hardback books of Kristen's life are available for $74.95.Kristen's nightgown costs $20,and a matching one for the doll owner is an additional $38.Buy both together and the price is only $50.A hand-painted wooden bed and trunk for Kristen are available for $213.Shipping costs vary with the price of the merchandise ordered.
-Refer to the American Girl Doll.You can buy a doll at Walmart for $5.99.The high price of the American Girl doll is used to promote a high-quality image.The American Girl uses a _____ pricing strategy.

Accepted Answer

A)  markup 
B)  demand-based 
C)  prestige 
D)  penetration 
E)  supply-derived 
A)  markup 
B)  demand-based 
C)  prestige 
D)  penetration 
E)  supply-derived

Question 7

If demand for milk is inelastic,consumers will not change their purchasing habits greatly when the price of milk changes.

Accepted Answer

A) True 
 B)False

Question 8

Explain yield management systems (YMS)and discuss the types of industry were they are most appropriate.

Accepted Answer

Yield management systems are a technique

Question 9

Keystoning is:

Accepted Answer

A)  the practice of marking up prices by 100 percent 
B)  a method used for determining the point of elasticity 
C)  a plan for reducing marginal costs 
D)  the practice of maintaining variable costs at one-half of total fixed costs 
E)  a method of changing consumers' perceptions about price 
A)  the practice of marking up prices by 100 percent 
B)  a method used for determining the point of elasticity 
C)  a plan for reducing marginal costs 
D)  the practice of maintaining variable costs at one-half of total fixed costs 
E)  a method of changing consumers' perceptions about price

Question 10

When many substitute products are available,demand is inelastic.

Accepted Answer

A) True 
 B)False

Question 11

Pricing power is all about:

Accepted Answer

A)  profit maximization 
B)  eliminating price wars between competitors 
C)  perceived value to the customer 
D)  long-term maximization of cash 
E)  eliminating the competition 
A)  profit maximization 
B)  eliminating price wars between competitors 
C)  perceived value to the customer 
D)  long-term maximization of cash 
E)  eliminating the competition

Question 12

The owner of specialty kitchen retail store wants to determine what price she should put on a set of mixing bowls.They cost her $7.She desires a markup of 30 percent based on selling price.Which of the following is closest to the price she should charge her customers?

Accepted Answer

A)  $19 
B)  $12 
C)  $15 
D)  $10 
E)  $18 
A)  $19 
B)  $12 
C)  $15 
D)  $10 
E)  $18

Question 13

Bottles of Pure Hawaiian Air contain air that smells like the floral bouquet that greets tourists as they get off the plane in Hawaii.When a tourist shop began selling Pure Hawaiian Air,it charged $5 per bottle and could not keep up with the demand.It has since raised the price to $7.Now the shop is still selling all the bottles of Pure Hawaiian Air it carries,but the owner is not forced to reorder on a daily basis.The $7 price is probably a(n):

Accepted Answer

A)  supply schedule 
B)  symmetrical price 
C)  price equilibrium 
D)  inventory equalizer 
E)  inelastic price 
A)  supply schedule 
B)  symmetrical price 
C)  price equilibrium 
D)  inventory equalizer 
E)  inelastic price

Question 14

The difference between the retailer's cost and the selling price is the:

Accepted Answer

A)  gross margin 
B)  markup percentage 
C)  profit 
D)  keystone 
E)  breakeven profit 
A)  gross margin 
B)  markup percentage 
C)  profit 
D)  keystone 
E)  breakeven profit

Question 15

The quantity of a product that will be sold at various prices for a specified period is called:

Accepted Answer

A)  market share 
B)  demand 
C)  supply 
D)  value 
E)  revenue 
A)  market share 
B)  demand 
C)  supply 
D)  value 
E)  revenue

Question 16

When the NES Group lowered the price of its professional-grade meat slicers from $2,300 to $1,600,demand doubled from 4 units sold per month to 8 units per month.However,total revenue dropped.This is an example of:

Accepted Answer

A)  substitute goods 
B)  unitary elasticity 
C)  elastic demand 
D)  consumer shortage 
E)  inelastic demand 
A)  substitute goods 
B)  unitary elasticity 
C)  elastic demand 
D)  consumer shortage 
E)  inelastic demand

Question 17

Regency,Inc.makes disposable cap and gown sets for graduations.Each cap and gown set sells for $15.The average variable cost for manufacturing 10 cap and gown sets is $100.Total fixed costs for the year equal $65,000.Calculate the break-even point in units.

Accepted Answer

A)  650 
B)  765 
C)  1,300 
D)  4,334 
E)  13,000 
A)  650 
B)  765 
C)  1,300 
D)  4,334 
E)  13,000

Question 18

List the two primary determinants of price.What other factors can affect price setting?

Accepted Answer

The price established depends primarily

Question 19

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 a Thai farmer sells ten Kan Yao durians in the marketplace at the going rate of $200 each.If it cost a Thai farmer $125 to produce and market the Kan Yao durian that she has sold,the difference between these two numbers ($75),times the number sold (ten),represents the farmer's:

Accepted Answer

A)  ROI 
B)  revenue 
C)  profit 
D)  returns 
E)  COGS 
A)  ROI 
B)  revenue 
C)  profit 
D)  returns 
E)  COGS

Question 20

_____ determine what sales volume must be reached for a product before the company's total costs equal total revenue and no profits are earned.

Accepted Answer

A)  Marginal revenue estimates 
B)  Price equilibrium analyses 
C)  Break-even analyses 
D)  Average total cost (AT
C) figures 
E)  Marginal costs of goods sold 
A)  Marginal revenue estimates 
B)  Price equilibrium analyses 
C)  Break-even analyses 
D)  Average total cost (AT
C) figures 
E)  Marginal costs of goods sold

_____ occurs when an increase in sales exactly offsets a decrease in price so that total revenue remains exactly the same.

Maximization of cash should be a long-term objective.

What happens when demand is elastic?

All of the following factors directly affect the elasticity of demand EXCEPT:

Research indicates that when a country's inflation rate is high,demand becomes more elastic.

If demand for milk is inelastic,consumers will not change their purchasing habits greatly when the price of milk changes.

Explain yield management systems (YMS)and discuss the types of industry were they are most appropriate.

Keystoning is:

When many substitute products are available,demand is inelastic.

Pricing power is all about:

The owner of specialty kitchen retail store wants to determine what price she should put on a set of mixing bowls.They cost her $7.She desires a markup of 30 percent based on selling price.Which of the following is closest to the price she should charge her customers?

The difference between the retailer's cost and the selling price is the:

The quantity of a product that will be sold at various prices for a specified period is called:

When the NES Group lowered the price of its professional-grade meat slicers from $2,300 to $1,600,demand doubled from 4 units sold per month to 8 units per month.However,total revenue dropped.This is an example of:

Regency,Inc.makes disposable cap and gown sets for graduations.Each cap and gown set sells for $15.The average variable cost for manufacturing 10 cap and gown sets is $100.Total fixed costs for the year equal $65,000.Calculate the break-even point in units.

List the two primary determinants of price.What other factors can affect price setting?

_____ determine what sales volume must be reached for a product before the company's total costs equal total revenue and no profits are earned.

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

_____ occurs when an increase in sales exactly offsets a decrease in price so that total revenue remains exactly the same.

Maximization of cash should be a long-term objective.

What happens when demand is elastic?

All of the following factors directly affect the elasticity of demand EXCEPT:

Research indicates that when a country's inflation rate is high,demand becomes more elastic.

If demand for milk is inelastic,consumers will not change their purchasing habits greatly when the price of milk changes.

Explain yield management systems (YMS)and discuss the types of industry were they are most appropriate.

Keystoning is:

When many substitute products are available,demand is inelastic.

Pricing power is all about:

The owner of specialty kitchen retail store wants to determine what price she should put on a set of mixing bowls.They cost her $7.She desires a markup of 30 percent based on selling price.Which of the following is closest to the price she should charge her customers?

The difference between the retailer's cost and the selling price is the:

The quantity of a product that will be sold at various prices for a specified period is called:

When the NES Group lowered the price of its professional-grade meat slicers from $2,300 to $1,600,demand doubled from 4 units sold per month to 8 units per month.However,total revenue dropped.This is an example of:

Regency,Inc.makes disposable cap and gown sets for graduations.Each cap and gown set sells for $15.The average variable cost for manufacturing 10 cap and gown sets is $100.Total fixed costs for the year equal $65,000.Calculate the break-even point in units.

List the two primary determinants of price.What other factors can affect price setting?

_____ determine what sales volume must be reached for a product before the company's total costs equal total revenue and no profits are earned.

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