Question 1

_____ is a price tactic in which different customers pay different prices for essentially the same merchandise bought in equal quantities.

Accepted Answer

A) One-part pricing 
B) Price lining 
C) Flexible pricing 
D) Price skimming 
A) One-part pricing 
B) Price lining 
C) Flexible pricing 
D) Price skimming

Question 2

Which of the following is a similarity between price fixing and predatory pricing?

Accepted Answer

A) Both are illegal under the Federal Trade Commission Act. 
B) Both are fine-tuning techniques that do not change the general price level. 
C) Both typically discourage and block competition from entering a market. 
D) Both may ignore demand or cost or both. 
A) Both are illegal under the Federal Trade Commission Act. 
B) Both are fine-tuning techniques that do not change the general price level. 
C) Both typically discourage and block competition from entering a market. 
D) Both may ignore demand or cost or both.

Question 3

Fresnas Designs Inc. is a company known for its quality interior decorations, customized service, and affordable prices. Given the high demand for its service, the management of Fresnas Designs Inc. could price its products higher, but it prefers to price its products such that it will earn a reasonable revenue. The management of Fresnas Designs Inc. bases its pricing policy on _____.

Accepted Answer

A) sales maximization 
B) earning satisfactory profits 
C) creating retained earnings 
D) status quo pricing 
A) sales maximization 
B) earning satisfactory profits 
C) creating retained earnings 
D) status quo pricing

Question 4

As products enter the growth stage of the product life cycle, prices generally begin to stabilize.

Accepted Answer

A) True 
 B)False

Question 5

When Lofonift Inc. introduced its flagship product, an MP3 player, it captured the market by offering its product at a very low price. This gradually forced many of its competitors out of business. Once its competitors were out of business, Lofonift Inc. raised the price. In this scenario, Lofonift Inc. most likely indulged in _____.

Accepted Answer

A) predatory pricing 
B) price discrimination 
C) status quo pricing 
D) price fixing 
A) predatory pricing 
B) price discrimination 
C) status quo pricing 
D) price fixing

Question 6

A price skimming strategy is most often used for a new product when:

Accepted Answer

A) competition in the market is abundant. 
B) customers are unwilling to spend a large amount of money on the product. 
C) the supply of the product is greater than its demand. 
D) the product is perceived by the target market as having unique advantages. 
A) competition in the market is abundant. 
B) customers are unwilling to spend a large amount of money on the product. 
C) the supply of the product is greater than its demand. 
D) the product is perceived by the target market as having unique advantages.

Question 7

Univ Airlines and Mirago Airlines are competitors. They mutually agree to charge customers a certain price for airfreight. This leads to the several lawsuits being filed against them by other airlines. In this case, Univ Airlines and Mirago Airlines can be charged under _____.

Accepted Answer

A) the Clayton Act 
B) the Sarbanes-Oxley Act 
C) the Sherman Act 
D) the Robinson-Patman Act 
A) the Clayton Act 
B) the Sarbanes-Oxley Act 
C) the Sherman Act 
D) the Robinson-Patman Act

Question 8

Which of the following is an impact of the Internet on the shopping behavior of consumers?

Accepted Answer

A) The Internet auction business is likely to disappear in the future. 
B) Consumer reviews on the Internet about various products tend to be equal in quality. 
C) Business-to-business auctions are likely to be the dominant form of Internet auction in the future. 
D) Extranets will provide the best price for a particular product. 
A) The Internet auction business is likely to disappear in the future. 
B) Consumer reviews on the Internet about various products tend to be equal in quality. 
C) Business-to-business auctions are likely to be the dominant form of Internet auction in the future. 
D) Extranets will provide the best price for a particular product.

Question 9

A firm can charge different prices to different customers if the prices represent manufacturing or quantity discount savings.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements is true of price-quality relationships?

Accepted Answer

A) Consumers perceive lower-priced goods to be more long lasting than higher-priced goods. 
B) Consumers believe that higher priced goods are manufactured with better quality of ingredients. 
C) Consumers lack information about the quality of lower priced goods due to poor advertising. 
D) Consumer demands for higher priced goods remain unchanged even if their quality declines. 
A) Consumers perceive lower-priced goods to be more long lasting than higher-priced goods. 
B) Consumers believe that higher priced goods are manufactured with better quality of ingredients. 
C) Consumers lack information about the quality of lower priced goods due to poor advertising. 
D) Consumer demands for higher priced goods remain unchanged even if their quality declines.

Question 11

When a seller establishes a series of prices for a type of merchandise, a purchase agreement is violated.

Accepted Answer

A) True 
 B)False

Question 12

Diffusion Research Company specializes in conducting market research for various firms. When it receives a new research proposal, its management first estimates the cost of conducting the research and delivering the final research report. The management attempts to then reduce the costs through efficient operations. In this scenario, Diffusion Research Company has a _____ objective.

Accepted Answer

A) profit-oriented pricing 
B) cash maximization pricing 
C) status quo pricing 
D) sales-oriented pricing 
A) profit-oriented pricing 
B) cash maximization pricing 
C) status quo pricing 
D) sales-oriented pricing

Question 13

Unlike a firm that launches a new item resembling several others already on the market, a firm that introduces a totally new product with no close substitutes will have no pricing freedom.

Accepted Answer

A) True 
 B)False

Question 14

Product life cycles can only be measured in years.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements is true of value-based pricing?

Accepted Answer

A) It is a modification of uniform delivered pricing. 
B) It is sometimes called postage stamp pricing. 
C) It has grown out of the quality movement. 
D) It presents drawbacks if costs are continually rising. 
A) It is a modification of uniform delivered pricing. 
B) It is sometimes called postage stamp pricing. 
C) It has grown out of the quality movement. 
D) It presents drawbacks if costs are continually rising.

Question 16

Ava Lawnmowers Inc. is a company that manufactures and sells lawn mowers. Since it faces stiff competition in the market, it sells its products at different prices depending on the number of lawn mowers purchased by the consumers. In this scenario, the company indulges in _____.

Accepted Answer

A) penetration pricing 
B) price skimming 
C) price discrimination 
D) predatory pricing 
A) penetration pricing 
B) price skimming 
C) price discrimination 
D) predatory pricing

Question 17

Prices always steadily decline for a product in the decline stage of the product life cycle.

Accepted Answer

A) True 
 B)False

Question 18

Adequate distribution for a new product can often be attained by:

Accepted Answer

A) offering a larger-than-usual profit margin to distributors. 
B) having different model or serial numbers for products. 
C) allowing customers to get involved in showrooming. 
D) increasing the prices of the products. 
A) offering a larger-than-usual profit margin to distributors. 
B) having different model or serial numbers for products. 
C) allowing customers to get involved in showrooming. 
D) increasing the prices of the products.

Question 19

_____ does not change as output is increased or decreased.

Accepted Answer

A) Marginal cost 
B) Dependent cost 
C) Fixed cost 
D) Opportunity cost 
A) Marginal cost 
B) Dependent cost 
C) Fixed cost 
D) Opportunity cost

Question 20

Define consumer penalty and give reasons for imposing consumer penalties.

Accepted Answer

Answers will vary. More and more busines

_____ is a price tactic in which different customers pay different prices for essentially the same merchandise bought in equal quantities.

Which of the following is a similarity between price fixing and predatory pricing?

As products enter the growth stage of the product life cycle, prices generally begin to stabilize.

A price skimming strategy is most often used for a new product when:

Univ Airlines and Mirago Airlines are competitors. They mutually agree to charge customers a certain price for airfreight. This leads to the several lawsuits being filed against them by other airlines. In this case, Univ Airlines and Mirago Airlines can be charged under _____.

Which of the following is an impact of the Internet on the shopping behavior of consumers?

A firm can charge different prices to different customers if the prices represent manufacturing or quantity discount savings.

Which of the following statements is true of price-quality relationships?

When a seller establishes a series of prices for a type of merchandise, a purchase agreement is violated.

Unlike a firm that launches a new item resembling several others already on the market, a firm that introduces a totally new product with no close substitutes will have no pricing freedom.

Product life cycles can only be measured in years.

Which of the following statements is true of value-based pricing?

Ava Lawnmowers Inc. is a company that manufactures and sells lawn mowers. Since it faces stiff competition in the market, it sells its products at different prices depending on the number of lawn mowers purchased by the consumers. In this scenario, the company indulges in _____.

Prices always steadily decline for a product in the decline stage of the product life cycle.

Adequate distribution for a new product can often be attained by:

_____ does not change as output is increased or decreased.

Define consumer penalty and give reasons for imposing consumer penalties.

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

Marketing Research

Product Concepts

Developing and Managing Products

Services and Nonprofit Organization Marketing

Supply Chain Management and Marketing Channels

Retailing

Marketing Communications

Advertising, Public Relations, and Sales Promotion

Personal Selling and Sales Management

Social Media and Marketing

Filters

Exam 19: Pricing Concepts

_____ is a price tactic in which different customers pay different prices for essentially the same merchandise bought in equal quantities.

Which of the following is a similarity between price fixing and predatory pricing?

As products enter the growth stage of the product life cycle, prices generally begin to stabilize.

A price skimming strategy is most often used for a new product when:

Univ Airlines and Mirago Airlines are competitors. They mutually agree to charge customers a certain price for airfreight. This leads to the several lawsuits being filed against them by other airlines. In this case, Univ Airlines and Mirago Airlines can be charged under _____.

Which of the following is an impact of the Internet on the shopping behavior of consumers?

A firm can charge different prices to different customers if the prices represent manufacturing or quantity discount savings.

Which of the following statements is true of price-quality relationships?

When a seller establishes a series of prices for a type of merchandise, a purchase agreement is violated.

Unlike a firm that launches a new item resembling several others already on the market, a firm that introduces a totally new product with no close substitutes will have no pricing freedom.

Product life cycles can only be measured in years.

Which of the following statements is true of value-based pricing?

Ava Lawnmowers Inc. is a company that manufactures and sells lawn mowers. Since it faces stiff competition in the market, it sells its products at different prices depending on the number of lawn mowers purchased by the consumers. In this scenario, the company indulges in _____.

Prices always steadily decline for a product in the decline stage of the product life cycle.

Adequate distribution for a new product can often be attained by:

_____ does not change as output is increased or decreased.

Define consumer penalty and give reasons for imposing consumer penalties.

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

Marketing Research

Product Concepts

Developing and Managing Products

Services and Nonprofit Organization Marketing

Supply Chain Management and Marketing Channels

Retailing

Marketing Communications

Advertising, Public Relations, and Sales Promotion

Personal Selling and Sales Management

Social Media and Marketing

Filters