Question 1

A firm has maximized its profits when its marginal revenue exceeds its marginal cost.

Accepted Answer

A) True 
 B)False

Question 2

If the formula for elasticity results in a measure of elasticity (E)equal to 1,the increase in sales exactly offsets the decrease in price so that total revenue remains the same.

Accepted Answer

A) True 
 B)False

Question 3

If Dunn's Best Jams and its distributors agree that the retailers will sell Dunn's jams at a certain price,at or above the price floor,Dunn's and its distributors probably practice _____.

Accepted Answer

A)  unfair pricing 
B)  resale price maintenance 
C)  deceptive pricing 
D)  price escalation 
E)  price depression 
A)  unfair pricing 
B)  resale price maintenance 
C)  deceptive pricing 
D)  price escalation 
E)  price depression

Question 4

Yield management systems can only be used by service industries.

Accepted Answer

A) True 
 B)False

Question 5

Money that is left over after paying for company activities is called:

Accepted Answer

A)  return on investment 
B)  a contribution margin 
C)  profit 
D)  net worth 
E)  a current asset 
A)  return on investment 
B)  a contribution margin 
C)  profit 
D)  net worth 
E)  a current asset

Question 6

Acme Lawnmowers sells its mowers to retailers at different prices,depending on whether they are independent stores or members of a national chain.It uses _____.

Accepted Answer

A)  unfair trade practices 
B)  price fixing 
C)  price discrimination 
D)  predatory pricing 
E)  bait pricing 
A)  unfair trade practices 
B)  price fixing 
C)  price discrimination 
D)  predatory pricing 
E)  bait pricing

Question 7

When Nesco brand food hydrators sold for $59.99,Nesco sold 90 dehydrators.When the company dropped the price of its dehydrators to $44.95,it sold 145 dehydrators.Demand for the food dehydrators appears to be:

Accepted Answer

A)  elastic 
B)  inelastic 
C)  unitary 
D)  symmetrical 
E)  asymmetrical 
A)  elastic 
B)  inelastic 
C)  unitary 
D)  symmetrical 
E)  asymmetrical

Question 8

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.In terms of the costs of producing the doll and its accessories,the salary of the graphic designer who does the layout for the American Girl catalog is a(n):

Accepted Answer

A)  markup cost 
B)  variable cost 
C)  fixed cost 
D)  derived cost 
E)  elastic cost 
A)  markup cost 
B)  variable cost 
C)  fixed cost 
D)  derived cost 
E)  elastic cost

Question 9

_____ 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

Question 10

Dixie Furniture Company has recently moved to a new,larger location.At this new location,it has been unable to attract sufficient customers.Its owner does not have the cash to pay the current loan installment due on the building and inventory so he decided to reduce all merchandise prices by at least 50 percent for a weekend sale to earn enough to make his loan payment.His pricing objective can be classified as:

Accepted Answer

A)  market share maximization 
B)  satisfactory profits 
C)  asset maximization 
D)  sales maximization 
E)  target ROI 
A)  market share maximization 
B)  satisfactory profits 
C)  asset maximization 
D)  sales maximization 
E)  target ROI

Question 11

When price decreases and total revenue falls,demand is:

Accepted Answer

A)  elastic 
B)  inelastic 
C)  absolute 
D)  unitary 
E)  stable 
A)  elastic 
B)  inelastic 
C)  absolute 
D)  unitary 
E)  stable

Question 12

For which of the following situations would a price-skimming strategy be most appropriate?

Accepted Answer

A)  the addition of a new comic book series with an obviously gay hero 
B)  the introduction of a new brand of bottled water 
C)  the elimination of demand for low wattage light bulbs 
D)  the introduction of a unique,roomy automobile model that has extremely low energy and fuel costs 
E)  the introduction of a Barbie Olympic champion doll by Mattel and the International Olympic Committee 
A)  the addition of a new comic book series with an obviously gay hero 
B)  the introduction of a new brand of bottled water 
C)  the elimination of demand for low wattage light bulbs 
D)  the introduction of a unique,roomy automobile model that has extremely low energy and fuel costs 
E)  the introduction of a Barbie Olympic champion doll by Mattel and the International Olympic Committee

Question 13

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

Question 14

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 15

Maximization of cash should be a long-term objective.

Accepted Answer

A) True 
 B)False

Question 16

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 17

When a firm introduces a new product at a relatively low price because it hopes to reach the mass market,it is following a _____ strategy.The low price is designed to capture a large share of a substantial market and produce lower production costs.

Accepted Answer

A)  penetration pricing 
B)  price-insensitive demand 
C)  price-skimming 
D)  price elasticity 
E)  cost bundling 
A)  penetration pricing 
B)  price-insensitive demand 
C)  price-skimming 
D)  price elasticity 
E)  cost bundling

Question 18

A cost that changes with the level of output is called a(n)_____ cost.

Accepted Answer

A)  liquidity 
B)  variable 
C)  fixed 
D)  asset 
E)  elastic 
A)  liquidity 
B)  variable 
C)  fixed 
D)  asset 
E)  elastic

Question 19

_____ 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 20

When the price of a product is set at a level where demand and supply are the same,_____ has been achieved.

Accepted Answer

A)  equilibrium 
B)  stability 
C)  leverage 
D)  symmetry 
E)  status quo 
A)  equilibrium 
B)  stability 
C)  leverage 
D)  symmetry 
E)  status quo

A firm has maximized its profits when its marginal revenue exceeds its marginal cost.

If the formula for elasticity results in a measure of elasticity (E)equal to 1,the increase in sales exactly offsets the decrease in price so that total revenue remains the same.

If Dunn's Best Jams and its distributors agree that the retailers will sell Dunn's jams at a certain price,at or above the price floor,Dunn's and its distributors probably practice _____.

Yield management systems can only be used by service industries.

Money that is left over after paying for company activities is called:

Acme Lawnmowers sells its mowers to retailers at different prices,depending on whether they are independent stores or members of a national chain.It uses _____.

When Nesco brand food hydrators sold for $59.99,Nesco sold 90 dehydrators.When the company dropped the price of its dehydrators to $44.95,it sold 145 dehydrators.Demand for the food dehydrators appears to be:

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

When price decreases and total revenue falls,demand is:

For which of the following situations would a price-skimming strategy be most appropriate?

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

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

Maximization of cash should be a long-term objective.

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

When a firm introduces a new product at a relatively low price because it hopes to reach the mass market,it is following a _____ strategy.The low price is designed to capture a large share of a substantial market and produce lower production costs.

A cost that changes with the level of output is called a(n)_____ cost.

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

When the price of a product is set at a level where demand and supply are the same,_____ has been achieved.

An Overview of Marketing

Strategic Planning for Competitive Advantage

Ethics & 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 Concepts

Developing and Managing Products

Marketing Channels and Supply Chain Management

Retailing

Marketing Communications and Advertising

Public Relations, Sales Promotion, and Personal Selling

Filters

Exam 16: Pricing Concepts

A firm has maximized its profits when its marginal revenue exceeds its marginal cost.

If the formula for elasticity results in a measure of elasticity (E)equal to 1,the increase in sales exactly offsets the decrease in price so that total revenue remains the same.

If Dunn's Best Jams and its distributors agree that the retailers will sell Dunn's jams at a certain price,at or above the price floor,Dunn's and its distributors probably practice _____.

Yield management systems can only be used by service industries.

Money that is left over after paying for company activities is called:

Acme Lawnmowers sells its mowers to retailers at different prices,depending on whether they are independent stores or members of a national chain.It uses _____.

When Nesco brand food hydrators sold for $59.99,Nesco sold 90 dehydrators.When the company dropped the price of its dehydrators to $44.95,it sold 145 dehydrators.Demand for the food dehydrators appears to be:

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

When price decreases and total revenue falls,demand is:

For which of the following situations would a price-skimming strategy be most appropriate?

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

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

Maximization of cash should be a long-term objective.

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

When a firm introduces a new product at a relatively low price because it hopes to reach the mass market,it is following a _____ strategy.The low price is designed to capture a large share of a substantial market and produce lower production costs.

A cost that changes with the level of output is called a(n)_____ cost.

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

When the price of a product is set at a level where demand and supply are the same,_____ has been achieved.

An Overview of Marketing

Strategic Planning for Competitive Advantage

Ethics & 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 Concepts

Developing and Managing Products

Marketing Channels and Supply Chain Management

Retailing

Marketing Communications and Advertising

Public Relations, Sales Promotion, and Personal Selling

Filters