Question 1

What is the difference between fixed and variable costs? Give examples of each type of cost.

Accepted Answer

FIXED COSTS are those expenses of the fi

Question 2

At a price of $654,400 the SSC Ultimate Aero has been ranked as the third most expensive car in the world.The company is only planning to build twenty-five of the current model.If that matches the demand for the Ultimate Aero,then a state of _____has been achieved.

Accepted Answer

A)  symmetry 
B)  marketing balance 
C)  unitary economics 
D)  commerce stability 
E)  price equilibrium 
A)  symmetry 
B)  marketing balance 
C)  unitary economics 
D)  commerce stability 
E)  price equilibrium

Question 3

A shortage of blood for transfusions for injured animals has resulted in the introduction of a synthesized product called Oxyglobin,which can be used effectively as a blood replacement.The manufacturer of the product has put a high price on the product in order to recoup its research and development costs.The manufacturer of Oxyglobin is using a _____ policy.

Accepted Answer

A)  price-banding 
B)  penetration pricing 
C)  price-lining 
D)  bundling costs 
E)  price-skimming 
A)  price-banding 
B)  penetration pricing 
C)  price-lining 
D)  bundling costs 
E)  price-skimming

Question 4

Profit maximization occurs when:

Accepted Answer

A)  total costs equals average fixed revenue 
B)  average variable costs are larger than average total costs 
C)  total costs equal total variable costs 
D)  marginal variable costs equal average revenues 
E)  marginal revenue equals marginal cost 
A)  total costs equals average fixed revenue 
B)  average variable costs are larger than average total costs 
C)  total costs equal total variable costs 
D)  marginal variable costs equal average revenues 
E)  marginal revenue equals marginal cost

Question 5

The marketing manager of icruise.com (a travel Web site targeted to consumers who want a luxury vacation)finds that the firm can gain market share and become the industry leader if it slashes prices by 50 percent during the month of December.However,the vice president of finance is committed to reporting a 25 percent return on investment at all times.This conflict illustrates:

Accepted Answer

A)  a need to eliminate low-profit products 
B)  a lack of corporate concentration on the marketing concept 
C)  how pricing operates in a mature marketplace 
D)  the need for trade-offs in pricing objectives 
E)  how target markets can be ignored 
A)  a need to eliminate low-profit products 
B)  a lack of corporate concentration on the marketing concept 
C)  how pricing operates in a mature marketplace 
D)  the need for trade-offs in pricing objectives 
E)  how target markets can be ignored

Question 6

Personal Touch produces and markets beaded purses.When graphed,the demand schedule for its purses is a straight line.If one purse costs $20,5,000 beaded purses are sold.At $25,4,500 purses are sold.How many beaded purses will be sold if the price per purse is increased to $30?

Accepted Answer

A)  5,500 
B)  4,250 
C)  4,000 
D)  3,750 
E)  3,500 
A)  5,500 
B)  4,250 
C)  4,000 
D)  3,750 
E)  3,500

Question 7

In 2008 United Airlines and American Airlines disclosed settlements in a class-action lawsuit over allegations of airfreight price fixing.This means the companies _____.

Accepted Answer

A)  tried to charge fees for air fright that were below costs 
B)  charged customers different amounts for the same shipments 
C)  agreed on the price they would charge customers for air freight 
D)  used uniform geographic pricing 
E)  created an artificial demand for shipping 
A)  tried to charge fees for air fright that were below costs 
B)  charged customers different amounts for the same shipments 
C)  agreed on the price they would charge customers for air freight 
D)  used uniform geographic pricing 
E)  created an artificial demand for shipping

Question 8

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 9

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 10

When many substitute products are available,demand is inelastic.

Accepted Answer

A) True 
 B)False

Question 11

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 12

Apple iPhone
Apple Inc.iPhone went on sale on June 29,2007.Apple's loyal and enthusiastic customer base is known for rushing to purchase its new products and the iPhone enjoyed a tremendous amount of "buzz" before its introduction.As expected,the iPhone entered the market at what many believed to be a high price ($599).However,within weeks the price was reduced to $399.By the end of 2007 over 8 million iPhones had sold in the U.S.marketplace.By most,if not all measures,the original iPhone was a huge success for Apple and it exclusive U.S.carrier AT&T.
On July 11ᵗʰ,2008,Apple Inc.released the iPhone 3G,which it advertised as twice as fast as the original iPhone for half the cost.However,in order to obtain an iPhone at the new price of $199,buyers had to agree to a two-year service contract with AT&T.This allows iPhone users to receive phone calls and email,and search the web on the same device.A single charge of $59.99 from AT&T included 450 minutes of cellular calls,with free nights and weekend minutes,unlimited data,visual voicemail,200 text messages,rollover minutes,and unlimited mobile-to-mobile service within the AT&T network.This approach succeeded and over a million iPhone 3Gs were sold during the introductory weekend.
-Refer to Apple iPhone.Apple and AT&T have several options available for competing with Samsung and its Instinct phone.If Apple and AT&T choose to compete by pricing their product at a low price to drive Samsung out of the market,this would be considered _____.

Accepted Answer

A)  price fixing 
B)  retail price maintenance 
C)  price discrimination 
D)  predatory pricing 
E)  fair competition 
A)  price fixing 
B)  retail price maintenance 
C)  price discrimination 
D)  predatory pricing 
E)  fair competition

Question 13

The manager of a souvenir shop in Florida graphed the demand per week for fresh orange juice.The graph indicates a demand schedule that slopes downward and to the right.This graph indicates that the quantity of juice demanded increases as:

Accepted Answer

A)  cost increases 
B)  supply decreases 
C)  price increases 
D)  price decreases 
E)  supply increases 
A)  cost increases 
B)  supply decreases 
C)  price increases 
D)  price decreases 
E)  supply increases

Question 14

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.If it cost a Thai farmer $100 to produce and $25 to market the Kan Yao durian that she sells for $200 at the marketplace,her revenue,for each durian sold,would be _____.

Accepted Answer

A)  $125 
B)  $200 
C)  $25 
D)  $100 
E)  $325 
A)  $125 
B)  $200 
C)  $25 
D)  $100 
E)  $325

Question 15

Allstate has more than 1,500 price levels that are determined by a complex algorithms that analyzes 16 credit report variables,including late payments and card balances.Allstate is using a _____ to set prices.

Accepted Answer

A)  yield management system 
B)  capacity correlation system 
C)  service forecasting tools 
D)  service management system 
E)  capacity maintenance tool 
A)  yield management system 
B)  capacity correlation system 
C)  service forecasting tools 
D)  service management system 
E)  capacity maintenance tool

Question 16

Why are marketing managers finding it more difficult to set prices in today's environment?

Accepted Answer

A)  Inflationary and recessionary periods have made customers less price-sensitive. 
B)  Fewer dealer and generic brands are available because the competition has been eliminated. 
C)  The high rate of new-product introductions has led to careful reevaluation by consumers. 
D)  Marketing managers are finding it difficult to compare prices between suppliers. 
E)  Buyers are less informed and are less price-sensitive. 
A)  Inflationary and recessionary periods have made customers less price-sensitive. 
B)  Fewer dealer and generic brands are available because the competition has been eliminated. 
C)  The high rate of new-product introductions has led to careful reevaluation by consumers. 
D)  Marketing managers are finding it difficult to compare prices between suppliers. 
E)  Buyers are less informed and are less price-sensitive.

Question 17

Apple iPhone
Apple Inc.iPhone went on sale on June 29,2007.Apple's loyal and enthusiastic customer base is known for rushing to purchase its new products and the iPhone enjoyed a tremendous amount of "buzz" before its introduction.As expected,the iPhone entered the market at what many believed to be a high price ($599).However,within weeks the price was reduced to $399.By the end of 2007 over 8 million iPhones had sold in the U.S.marketplace.By most,if not all measures,the original iPhone was a huge success for Apple and it exclusive U.S.carrier AT&T.
On July 11ᵗʰ,2008,Apple Inc.released the iPhone 3G,which it advertised as twice as fast as the original iPhone for half the cost.However,in order to obtain an iPhone at the new price of $199,buyers had to agree to a two-year service contract with AT&T.This allows iPhone users to receive phone calls and email,and search the web on the same device.A single charge of $59.99 from AT&T included 450 minutes of cellular calls,with free nights and weekend minutes,unlimited data,visual voicemail,200 text messages,rollover minutes,and unlimited mobile-to-mobile service within the AT&T network.This approach succeeded and over a million iPhone 3Gs were sold during the introductory weekend.
-Refer to Apple iPhone.When the iPhone 3G was released at half the cost of the current iPhone,it appeared that Apple's strategic focus had shifted from maximizing profits to gaining market share.Its lowered price was consistent with the _____ pricing approach.

Accepted Answer

A)  price-bracketing 
B)  penetration pricing 
C)  price-lining 
D)  price-fixing 
E)  price skimming 
A)  price-bracketing 
B)  penetration pricing 
C)  price-lining 
D)  price-fixing 
E)  price skimming

Question 18

Manufacturers can do all of the following to regain some control over the price their products are sold for at the retail level EXCEPT:

Accepted Answer

A)  require resellers to maintain prices in line with competitors' prices 
B)  developing brand loyalty in consumers by delivering quality and value 
C)  avoiding doing business with price-cutting discounters 
D)  franchising 
E)  using an exclusive distribution system 
A)  require resellers to maintain prices in line with competitors' prices 
B)  developing brand loyalty in consumers by delivering quality and value 
C)  avoiding doing business with price-cutting discounters 
D)  franchising 
E)  using an exclusive distribution system

Question 19

The price of the good or service is a key decision for a marketer because it most significantly and directly affects the product's:

Accepted Answer

A)  distribution 
B)  costs 
C)  demand 
D)  promotion 
E)  quality 
A)  distribution 
B)  costs 
C)  demand 
D)  promotion 
E)  quality

Question 20

If a product has high pricing power this would indicate a situation of:

Accepted Answer

A)  unitary demand 
B)  inelastic demand 
C)  elastic demand 
D)  constant demand 
E)  revenue maximization 
A)  unitary demand 
B)  inelastic demand 
C)  elastic demand 
D)  constant demand 
E)  revenue maximization

What is the difference between fixed and variable costs? Give examples of each type of cost.

At a price of $654,400 the SSC Ultimate Aero has been ranked as the third most expensive car in the world.The company is only planning to build twenty-five of the current model.If that matches the demand for the Ultimate Aero,then a state of _____has been achieved.

Profit maximization occurs when:

Personal Touch produces and markets beaded purses.When graphed,the demand schedule for its purses is a straight line.If one purse costs $20,5,000 beaded purses are sold.At $25,4,500 purses are sold.How many beaded purses will be sold if the price per purse is increased to $30?

In 2008 United Airlines and American Airlines disclosed settlements in a class-action lawsuit over allegations of airfreight price fixing.This means the companies _____.

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

When many substitute products are available,demand is inelastic.

The manager of a souvenir shop in Florida graphed the demand per week for fresh orange juice.The graph indicates a demand schedule that slopes downward and to the right.This graph indicates that the quantity of juice demanded increases as:

Allstate has more than 1,500 price levels that are determined by a complex algorithms that analyzes 16 credit report variables,including late payments and card balances.Allstate is using a _____ to set prices.

Why are marketing managers finding it more difficult to set prices in today's environment?

Manufacturers can do all of the following to regain some control over the price their products are sold for at the retail level EXCEPT:

The price of the good or service is a key decision for a marketer because it most significantly and directly affects the product's:

If a product has high pricing power this would indicate a situation of:

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

What is the difference between fixed and variable costs? Give examples of each type of cost.

At a price of $654,400 the SSC Ultimate Aero has been ranked as the third most expensive car in the world.The company is only planning to build twenty-five of the current model.If that matches the demand for the Ultimate Aero,then a state of _____has been achieved.

Profit maximization occurs when:

Personal Touch produces and markets beaded purses.When graphed,the demand schedule for its purses is a straight line.If one purse costs $20,5,000 beaded purses are sold.At $25,4,500 purses are sold.How many beaded purses will be sold if the price per purse is increased to $30?

In 2008 United Airlines and American Airlines disclosed settlements in a class-action lawsuit over allegations of airfreight price fixing.This means the companies _____.

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

When many substitute products are available,demand is inelastic.

The manager of a souvenir shop in Florida graphed the demand per week for fresh orange juice.The graph indicates a demand schedule that slopes downward and to the right.This graph indicates that the quantity of juice demanded increases as:

Allstate has more than 1,500 price levels that are determined by a complex algorithms that analyzes 16 credit report variables,including late payments and card balances.Allstate is using a _____ to set prices.

Why are marketing managers finding it more difficult to set prices in today's environment?

Manufacturers can do all of the following to regain some control over the price their products are sold for at the retail level EXCEPT:

The price of the good or service is a key decision for a marketer because it most significantly and directly affects the product's:

If a product has high pricing power this would indicate a situation of:

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