Question 1

Elastic demand is usually a result of the lack of substitute products.

Accepted Answer

A) True 
 B)False

Question 2

If a product has an inelastic demand and the manufacturer raises its price,

Accepted Answer

A) total revenue will increase. 
B) quantity demanded will decrease. 
C) the demand schedule will shift. 
D) the demand will become more inelastic. 
E) total revenue will decrease. 
A) total revenue will increase. 
B) quantity demanded will decrease. 
C) the demand schedule will shift. 
D) the demand will become more inelastic. 
E) total revenue will decrease.

Question 3

Knowing the number of units necessary to break even is important in setting the price.

Accepted Answer

A) True 
 B)False

Question 4

Price is a major component of the profit equation.

Accepted Answer

A) True 
 B)False

Question 5

What does the demand curve for a prestige product look like?

Accepted Answer

A) It is a straight line where the quantity sold continues to increase as the price of each product increases. 
B) It is a curve where the highest and the lowest prices yield the greatest quantity sold and mid-range prices produce the fewest sales. 
C) It forms a curve where the greatest quantity sold comes at a medium price and the quantities fall as the price increases or decreases. 
D) It forms a straight vertical line because of the prestige of the product,and quantity sold will remain stable regardless of the price. 
E) It slopes from left to right at a very mild slope;that is,as quantity increases,price decreases slowly. 
A) It is a straight line where the quantity sold continues to increase as the price of each product increases. 
B) It is a curve where the highest and the lowest prices yield the greatest quantity sold and mid-range prices produce the fewest sales. 
C) It forms a curve where the greatest quantity sold comes at a medium price and the quantities fall as the price increases or decreases. 
D) It forms a straight vertical line because of the prestige of the product,and quantity sold will remain stable regardless of the price. 
E) It slopes from left to right at a very mild slope;that is,as quantity increases,price decreases slowly.

Question 6

F.O.B.factory denotes the price of the products at the factory.If the price is quoted as F.O.B.shipping,then shipping costs are paid by the seller.

Accepted Answer

A) True 
 B)False

Question 7

The major disadvantage of using price competition is that it takes a long time to implement the changes in price.

Accepted Answer

A) True 
 B)False

Question 8

Costs are a major issue when establishing price.

Accepted Answer

A) True 
 B)False

Question 9

Suppose managers at Caterpillar have determined the costs associated with producing hay balers are equal to the price that they charge for the hay balers.This indicates that Caterpillar is producing at the ____ point.

Accepted Answer

A) breakeven 
B) marginal revenue less than marginal cost 
C) profit margin 
D) competitive price 
E) profit maximizing 
A) breakeven 
B) marginal revenue less than marginal cost 
C) profit margin 
D) competitive price 
E) profit maximizing

Question 10

Michelin notices that when the number of tires it sells increases from 1,000,000 to 1,000,001,total revenue rises $35.The $35 represents the firm's

Accepted Answer

A) average revenue. 
B) marginal revenue. 
C) price elasticity. 
D) average variable revenue. 
E) average total cost. 
A) average revenue. 
B) marginal revenue. 
C) price elasticity. 
D) average variable revenue. 
E) average total cost.

Question 11

A seller can change prices quickly in a price-competition situation.

Accepted Answer

A) True 
 B)False

Question 12

Scenario 20.1
Use the following to answer the questions.
Concession Supply sells hotdogs,buns,and nacho ingredients to several major league ballparks across the country.Currently,Concession Supply has the following pricing information for one case of hotdogs sold at Wrigley Field: Total fixed costs = $1,200,Selling price = $16,and Variable costs = $6.
-Refer to Scenario 20.1.What is the breakeven point in dollar sales volume?

Accepted Answer

A) $1,200 
B) $1,440 
C) $3,000 
D) $1,920 
E) $1,600 
A) $1,200 
B) $1,440 
C) $3,000 
D) $1,920 
E) $1,600

Question 13

A firm that competes on a price basis is unable to change prices frequently.

Accepted Answer

A) True 
 B)False

Question 14

Organizational goals have little to do with pricing decisions.

Accepted Answer

A) True 
 B)False

Question 15

Identify and describe the major types of discounts used for business markets.Then explain the reasons for using each type.

Accepted Answer

The answer of Identify and describe the major types of...

Question 16

If Seagram's marketers found that the firm's Crown Royal bourbon was a prestige product and raised its price,which of the following would most likely happen?

Accepted Answer

A) The quantity demanded would immediately fall. 
B) The quantity demanded would always increase. 
C) Above some price level,the quantity demanded would begin to decrease. 
D) The demand curve for the product would always shift to the right. 
E) The demand curve for the product would always shift to the left. 
A) The quantity demanded would immediately fall. 
B) The quantity demanded would always increase. 
C) Above some price level,the quantity demanded would begin to decrease. 
D) The demand curve for the product would always shift to the right. 
E) The demand curve for the product would always shift to the left.

Question 17

With prestige products,a firm will always be able to sell more at a higher price.

Accepted Answer

A) True 
 B)False

Question 18

Scenario 20.2
Use the following to answer the questions.
The BASF Chemical Company in Germany has developed a new rubberized coating.The product has an application for cell phones and other hand-held electronic devices that gives them protection from falls and scratches.BASF plans to market the product directly to businesses that manufacture the casings for these types of products.BASF currently uses a system of salespeople headquartered in Germany,while its primary business customers are in China.
-Refer to Scenario 20.2.BASF has decided to offer discounts to its businesses customers in the form of the following: For each order of $100,000 or more during the next 90 days,the buyer will receive a rebate of 5 percent.This type of pricing would be an example of ____ discounts.

Accepted Answer

A) allowance 
B) cash 
C) seasonal 
D) noncumulative 
E) cumulative 
A) allowance 
B) cash 
C) seasonal 
D) noncumulative 
E) cumulative

Question 19

How can the price at which a new product is introduced influence the entrance of competition into a market?

Accepted Answer

The price at which a new product is intr

Question 20

The point at which marginal revenue equals marginal cost is the breakeven point.

Accepted Answer

A) True 
 B)False

Elastic demand is usually a result of the lack of substitute products.

If a product has an inelastic demand and the manufacturer raises its price,

Knowing the number of units necessary to break even is important in setting the price.

Price is a major component of the profit equation.

What does the demand curve for a prestige product look like?

F.O.B.factory denotes the price of the products at the factory.If the price is quoted as F.O.B.shipping,then shipping costs are paid by the seller.

The major disadvantage of using price competition is that it takes a long time to implement the changes in price.

Costs are a major issue when establishing price.

Suppose managers at Caterpillar have determined the costs associated with producing hay balers are equal to the price that they charge for the hay balers.This indicates that Caterpillar is producing at the ____ point.

Michelin notices that when the number of tires it sells increases from 1,000,000 to 1,000,001,total revenue rises $35.The $35 represents the firm's

A seller can change prices quickly in a price-competition situation.

A firm that competes on a price basis is unable to change prices frequently.

Organizational goals have little to do with pricing decisions.

Identify and describe the major types of discounts used for business markets.Then explain the reasons for using each type.

If Seagram's marketers found that the firm's Crown Royal bourbon was a prestige product and raised its price,which of the following would most likely happen?

With prestige products,a firm will always be able to sell more at a higher price.

How can the price at which a new product is introduced influence the entrance of competition into a market?

The point at which marginal revenue equals marginal cost is the breakeven point.

An Overview of Strategic Marketing

Planning, Implementing, and Evaluating Marketing Strategies

The Marketing Environment

Social Responsibility and Ethics in Marketing

Marketing Research and Information Systems

Target Markets: Segmentation and Evaluation

Consumer Buying Behavior

Business Markets and Buying Behavior

Reaching Global Markets

Digital Marketing and Social Networking

Product Concepts

Developing and Managing Products

Services Marketing

Branding and Packaging

Marketing Channels and Supply-Chain Management

Retailing, direct Marketing, and Wholesaling

Integrated Marketing Communications

Advertising and Public Relations

Personal Selling and Sales Promotion

Setting Prices

Filters

Exam 20: Pricing Concepts

Elastic demand is usually a result of the lack of substitute products.

If a product has an inelastic demand and the manufacturer raises its price,

Knowing the number of units necessary to break even is important in setting the price.

Price is a major component of the profit equation.

What does the demand curve for a prestige product look like?

F.O.B.factory denotes the price of the products at the factory.If the price is quoted as F.O.B.shipping,then shipping costs are paid by the seller.

The major disadvantage of using price competition is that it takes a long time to implement the changes in price.

Costs are a major issue when establishing price.

Suppose managers at Caterpillar have determined the costs associated with producing hay balers are equal to the price that they charge for the hay balers.This indicates that Caterpillar is producing at the ____ point.

Michelin notices that when the number of tires it sells increases from 1,000,000 to 1,000,001,total revenue rises $35.The $35 represents the firm's

A seller can change prices quickly in a price-competition situation.

A firm that competes on a price basis is unable to change prices frequently.

Organizational goals have little to do with pricing decisions.

Identify and describe the major types of discounts used for business markets.Then explain the reasons for using each type.

If Seagram's marketers found that the firm's Crown Royal bourbon was a prestige product and raised its price,which of the following would most likely happen?

With prestige products,a firm will always be able to sell more at a higher price.

How can the price at which a new product is introduced influence the entrance of competition into a market?

The point at which marginal revenue equals marginal cost is the breakeven point.

An Overview of Strategic Marketing

Planning, Implementing, and Evaluating Marketing Strategies

The Marketing Environment

Social Responsibility and Ethics in Marketing

Marketing Research and Information Systems

Target Markets: Segmentation and Evaluation

Consumer Buying Behavior

Business Markets and Buying Behavior

Reaching Global Markets

Digital Marketing and Social Networking

Product Concepts

Developing and Managing Products

Services Marketing

Branding and Packaging

Marketing Channels and Supply-Chain Management

Retailing, direct Marketing, and Wholesaling

Integrated Marketing Communications

Advertising and Public Relations

Personal Selling and Sales Promotion

Setting Prices

Filters