Question 1

Pure competition occurs when there are many firms competing for customers in a given market but their products are differentiated.

Accepted Answer

A) True 
 B)False

Question 2

In a market with _______ there are many firms providing differentiated products.

Accepted Answer

A)  pure competition 
B)  oligopolistic competition 
C)  monopolistic competition 
D)  a monopoly 
E)  a duopoly 
A)  pure competition 
B)  oligopolistic competition 
C)  monopolistic competition 
D)  a monopoly 
E)  a duopoly

Question 3

Earl was known for driving 30 miles just to save a dollar on the price of his favorite beverage.Earl perceived price as _______ for a good or service,while most consumers recognize price as the _______ made to acquire a good or service.

Accepted Answer

A)  the money paid; overall sacrifice 
B)  a variable cost; fixed cost 
C)  a fixed cost; variable payment 
D)  the overall sacrifice; monetary payment 
E)  the break-even amount; total cost 
A)  the money paid; overall sacrifice 
B)  a variable cost; fixed cost 
C)  a fixed cost; variable payment 
D)  the overall sacrifice; monetary payment 
E)  the break-even amount; total cost

Question 4

One problem in relying on price elasticity and demand curves when setting prices is

Accepted Answer

A)  the way a product or service is marketed can have a profound impact on price elasticity. 
B)  the underlying ideas of the demand curve and elasticity are less relevant in the modern economy. 
C)  only economists can properly analyze demand curves and set prices using this tool. 
D)  competitors can construct the same demand curves,so there is no advantage in using them. 
E)  marketing split from economics over the ideas of demand and elasticity. 
A)  the way a product or service is marketed can have a profound impact on price elasticity. 
B)  the underlying ideas of the demand curve and elasticity are less relevant in the modern economy. 
C)  only economists can properly analyze demand curves and set prices using this tool. 
D)  competitors can construct the same demand curves,so there is no advantage in using them. 
E)  marketing split from economics over the ideas of demand and elasticity.

Question 5

Why are price wars more common in oligopolies than in pure competition markets?

Accepted Answer

In oligopolies,there are only a few firm

Question 6

The demand curve for prestige products generally slopes downward due to higher prices.

Accepted Answer

A) True 
 B)False

Question 7

If a 1 percent decrease in price results in less than a 1 percent increase in the quantity demanded,demand is

Accepted Answer

A)  cross-price elastic. 
B)  price inelastic. 
C)  price elastic. 
D)  status quo elastic. 
E)  derived demand inelastic. 
A)  cross-price elastic. 
B)  price inelastic. 
C)  price elastic. 
D)  status quo elastic. 
E)  derived demand inelastic.

Question 8

Jason rents rooms in his hotel for an average of $100 per night.The variable cost per rented room is $20.His fixed costs are $100,000 and his target profit is $20,000.For Jason,to earn his target profit,he will need to rent out ________ rooms.

Accepted Answer

A)  100 
B)  1,500 
C)  20,000 
D)  1,000 
E)  it cannot be determined from the information provided 
A)  100 
B)  1,500 
C)  20,000 
D)  1,000 
E)  it cannot be determined from the information provided

Question 9

A gray market employs irregular but not necessarily illegal methods of distributing products.

Accepted Answer

A) True 
 B)False

Question 10

Historically,prices were

Accepted Answer

A)  the center of attention in almost all marketing strategies. 
B)  analyzed and changed constantly. 
C)  calculated to minimize contribution per unit. 
D)  allowed to vary seasonally as cross-shopping tendencies fluctuated. 
E)  rarely changed except in response to radical shifts in market conditions. 
A)  the center of attention in almost all marketing strategies. 
B)  analyzed and changed constantly. 
C)  calculated to minimize contribution per unit. 
D)  allowed to vary seasonally as cross-shopping tendencies fluctuated. 
E)  rarely changed except in response to radical shifts in market conditions.

Question 11

How can a company find its way out of a market characterized by pure competition?

Accepted Answer

A)  Consistently offer the lowest price until other competitors leave the market 
B)  Increase prices and attract different,quality-oriented customers 
C)  Decrease the amount of available product until the market reacts 
D)  Increase the amount of available product to flood the market 
E)  Differentiate the product in some way,even by packaging,so customers will see it as distinct 
A)  Consistently offer the lowest price until other competitors leave the market 
B)  Increase prices and attract different,quality-oriented customers 
C)  Decrease the amount of available product until the market reacts 
D)  Increase the amount of available product to flood the market 
E)  Differentiate the product in some way,even by packaging,so customers will see it as distinct

Question 12

Explain how the demand curve works,and how it benefits a firm.

Accepted Answer

A demand curve shows how many units of a

Question 13

For which of the following is demand likely to be least sensitive to price increases?

Accepted Answer

A)  spring break vacations 
B)  a specific brand of cereal 
C)  prescription drugs 
D)  theater tickets 
E)  restaurant meals 
A)  spring break vacations 
B)  a specific brand of cereal 
C)  prescription drugs 
D)  theater tickets 
E)  restaurant meals

Question 14

When a firm sets its pricing strategy based on how it can add value to its products or services it has embraced a(n)_______ orientation to pricing.

Accepted Answer

A)  industry 
B)  sales 
C)  competitor 
D)  production 
E)  customer 
A)  industry 
B)  sales 
C)  competitor 
D)  production 
E)  customer

Question 15

Tess is the marketing manager for a fast-food restaurant chain.She uses a target return pricing strategy because her firm's primary objective is to

Accepted Answer

A)  increase profits. 
B)  increase sales. 
C)  decrease competition. 
D)  build customer satisfaction. 
E)  broaden the product line. 
A)  increase profits. 
B)  increase sales. 
C)  decrease competition. 
D)  build customer satisfaction. 
E)  broaden the product line.

Question 16

When the major league baseball season opens in April,teams that are located in the Midwest and Northeast are still experiencing colder and frequent rainy weather.This often results in fewer fans attending these April games.What can these ball clubs do to maximize their revenue during this time period?

Accepted Answer

The ball clubs could implement a dynamic

Question 17

Raymond estimates the fixed costs associated with opening a new bank branch are $500,000.He estimates the branch will attract 1,000 new customers who will cost $50 / year to service each of their accounts.He also expects to generate $100,000 in fees annually from these accounts.What will be the total cost of opening the new branch and remaining open for one year?

Accepted Answer

Total cost = Fixed c

Question 18

The observation that consumers are generally more sensitive to price increases than to price decreases suggests that

Accepted Answer

A)  most consumers cannot remember what price they paid the last time they bought a particular product. 
B)  it is easier to lose customers with a price increase than to gain customers with a price decrease. 
C)  most consumers would rather skip buying a product than pay a higher price. 
D)  most consumers are emotionally attached to their favorite products and are unlikely to change,even if the price changes. 
E)  firms gain more customers with price decreases than they lose with price increases. 
A)  most consumers cannot remember what price they paid the last time they bought a particular product. 
B)  it is easier to lose customers with a price increase than to gain customers with a price decrease. 
C)  most consumers would rather skip buying a product than pay a higher price. 
D)  most consumers are emotionally attached to their favorite products and are unlikely to change,even if the price changes. 
E)  firms gain more customers with price decreases than they lose with price increases.

Question 19

American Airlines just reduced its fares for summer flights by $100.Delta Airlines changes its pricing structure and reduces its flights by $100 as well.Delta is employing status quo pricing.

Accepted Answer

A) True 
 B)False

Question 20

At the break-even point,

Accepted Answer

A)  costs are zero. 
B)  price is maximized. 
C)  profits are zero. 
D)  fixed costs are zero. 
E)  contribution per unit is zero. 
A)  costs are zero. 
B)  price is maximized. 
C)  profits are zero. 
D)  fixed costs are zero. 
E)  contribution per unit is zero.

Pure competition occurs when there are many firms competing for customers in a given market but their products are differentiated.

In a market with _______ there are many firms providing differentiated products.

Earl was known for driving 30 miles just to save a dollar on the price of his favorite beverage.Earl perceived price as _ for a good or service,while most consumers recognize price as the _ made to acquire a good or service.

One problem in relying on price elasticity and demand curves when setting prices is

Why are price wars more common in oligopolies than in pure competition markets?

The demand curve for prestige products generally slopes downward due to higher prices.

If a 1 percent decrease in price results in less than a 1 percent increase in the quantity demanded,demand is

Jason rents rooms in his hotel for an average of $100 per night.The variable cost per rented room is $20.His fixed costs are $100,000 and his target profit is $20,000.For Jason,to earn his target profit,he will need to rent out ________ rooms.

A gray market employs irregular but not necessarily illegal methods of distributing products.

Historically,prices were

How can a company find its way out of a market characterized by pure competition?

Explain how the demand curve works,and how it benefits a firm.

For which of the following is demand likely to be least sensitive to price increases?

When a firm sets its pricing strategy based on how it can add value to its products or services it has embraced a(n)_______ orientation to pricing.

Tess is the marketing manager for a fast-food restaurant chain.She uses a target return pricing strategy because her firm's primary objective is to

The observation that consumers are generally more sensitive to price increases than to price decreases suggests that

American Airlines just reduced its fares for summer flights by $100.Delta Airlines changes its pricing structure and reduces its flights by $100 as well.Delta is employing status quo pricing.

At the break-even point,

Overview of Marketing

Developing Marketing Strategies and a Marketing Plan

Social and Mobile Marketing

Marketing Ethics

Analyzing the Marketing Environment

Consumer Behavior

Business-To-Business Marketing

Global Marketing

Segmentation, Targeting, and Positioning

Marketing Research

Product, Branding, and Packaging Decisions

Developing New Products

Services: the Intangible Product

Strategic Pricing Methods

Supply Chain and Channel Management

Retailing and Multichannel Marketing

Integrated Marketing Communications

Integrated Marketing Communications

Personal Selling and Sales Management

Filters

Exam 14: Pricing Concepts for Establishing Value

Pure competition occurs when there are many firms competing for customers in a given market but their products are differentiated.

In a market with _______ there are many firms providing differentiated products.

Earl was known for driving 30 miles just to save a dollar on the price of his favorite beverage.Earl perceived price as _______ for a good or service,while most consumers recognize price as the _______ made to acquire a good or service.

One problem in relying on price elasticity and demand curves when setting prices is

Why are price wars more common in oligopolies than in pure competition markets?

The demand curve for prestige products generally slopes downward due to higher prices.

If a 1 percent decrease in price results in less than a 1 percent increase in the quantity demanded,demand is

Jason rents rooms in his hotel for an average of $100 per night.The variable cost per rented room is $20.His fixed costs are $100,000 and his target profit is $20,000.For Jason,to earn his target profit,he will need to rent out ________ rooms.

A gray market employs irregular but not necessarily illegal methods of distributing products.

Historically,prices were

How can a company find its way out of a market characterized by pure competition?

Explain how the demand curve works,and how it benefits a firm.

For which of the following is demand likely to be least sensitive to price increases?

When a firm sets its pricing strategy based on how it can add value to its products or services it has embraced a(n)_______ orientation to pricing.

Tess is the marketing manager for a fast-food restaurant chain.She uses a target return pricing strategy because her firm's primary objective is to

The observation that consumers are generally more sensitive to price increases than to price decreases suggests that

American Airlines just reduced its fares for summer flights by $100.Delta Airlines changes its pricing structure and reduces its flights by $100 as well.Delta is employing status quo pricing.

At the break-even point,

Overview of Marketing

Developing Marketing Strategies and a Marketing Plan

Social and Mobile Marketing

Marketing Ethics

Analyzing the Marketing Environment

Consumer Behavior

Business-To-Business Marketing

Global Marketing

Segmentation, Targeting, and Positioning

Marketing Research

Product, Branding, and Packaging Decisions

Developing New Products

Services: the Intangible Product

Strategic Pricing Methods

Supply Chain and Channel Management

Retailing and Multichannel Marketing

Integrated Marketing Communications

Integrated Marketing Communications

Personal Selling and Sales Management

Filters

Earl was known for driving 30 miles just to save a dollar on the price of his favorite beverage.Earl perceived price as _ for a good or service,while most consumers recognize price as the _ made to acquire a good or service.