Question 1

Which of the following is a measure of customers' sensitivity to changes in price?

Accepted Answer

A)  liquidity ratio 
B)  break-even point 
C)  price elasticity of demand 
D)  marginal analysis 
E)  basing-point 
A)  liquidity ratio 
B)  break-even point 
C)  price elasticity of demand 
D)  marginal analysis 
E)  basing-point

Question 2

A demand curve never appears on a graph as a straight line.

Accepted Answer

A) True 
 B)False

Question 3

In a(n) ________, all of the buyers know the highest price bid at any point in time.

Accepted Answer

A)  reverse auction 
B)  dynamic auction 
C)  open auction 
D)  reserve auction 
E)  price-lining auction 
A)  reverse auction 
B)  dynamic auction 
C)  open auction 
D)  reserve auction 
E)  price-lining auction

Question 4

________ is a new business strategy of offering a basic version of a product free of charge and then charging for upgraded versions of the product.

Accepted Answer

A)  Prestige pricing 
B)  Freemium 
C)  Price segmentation 
D)  Reverse marketing 
E)  Dynamic marketing 
A)  Prestige pricing 
B)  Freemium 
C)  Price segmentation 
D)  Reverse marketing 
E)  Dynamic marketing

Question 5

Which of the following occurs when price is inelastic?

Accepted Answer

A)  Price and revenue change in the same direction. 
B)  Revenues decrease when price increases. 
C)  Revenue is unaffected by price changes. 
D)  Quantity demanded increases when price increases. 
E)  The demand curve is more horizontal. 
A)  Price and revenue change in the same direction. 
B)  Revenues decrease when price increases. 
C)  Revenue is unaffected by price changes. 
D)  Quantity demanded increases when price increases. 
E)  The demand curve is more horizontal.

Question 6

When demand is ________, increases in price result in increases in total revenues, while decreases in price result in decreases in total revenue.

Accepted Answer

A)  elastic 
B)  inelastic 
C)  flexible 
D)  supply-driven 
E)  cross-elastic 
A)  elastic 
B)  inelastic 
C)  flexible 
D)  supply-driven 
E)  cross-elastic

Question 7

A firm is using a(n) ________ strategy when it introduces a product at a very low price to gain market share early on.

Accepted Answer

A)  skimming price 
B)  trial pricing 
C)  intensive pricing 
D)  penetration pricing 
E)  high/low 
A)  skimming price 
B)  trial pricing 
C)  intensive pricing 
D)  penetration pricing 
E)  high/low

Question 8

Many people rely on a prescription drug to control their cholesterol. An increase in the price of the drug would have little effect on the quantity demanded because there are no substitutes for the drug and because people who take it have no choice but to continue taking it if they wish to stay healthy. The demand for the cholesterol drug is ________.

Accepted Answer

A)  elastic 
B)  inelastic 
C)  cross-elastic 
D)  supply-driven 
E)  asymmetrical 
A)  elastic 
B)  inelastic 
C)  cross-elastic 
D)  supply-driven 
E)  asymmetrical

Question 9

Explain the concept of price bundling. Why would a retailer implement this pricing strategy? Give one example of this strategy being implemented.

Accepted Answer

Price bundling means selling two or more

Question 10

Value pricing is the opposite of cost-based pricing.

Accepted Answer

A) True 
 B)False

Question 11

The simplest pricing method is break-even pricing: adding a standard markup to the cost of the product.

Accepted Answer

A) True 
 B)False

Question 12

________ refers to the sale of two or more goods or services as a single package for one price.

Accepted Answer

A)  Two-part pricing 
B)  Captive pricing 
C)  Price bundling 
D)  Decoy pricing 
E)  Trial pricing 
A)  Two-part pricing 
B)  Captive pricing 
C)  Price bundling 
D)  Decoy pricing 
E)  Trial pricing

Question 13

The most common cost-based approach to pricing is ________.

Accepted Answer

A)  demand-based pricing 
B)  psychological pricing 
C)  yield management pricing 
D)  cost-plus pricing 
E)  high/low pricing 
A)  demand-based pricing 
B)  psychological pricing 
C)  yield management pricing 
D)  cost-plus pricing 
E)  high/low pricing

Question 14

Trade or functional discounts are offered by manufacturers to which of the following?

Accepted Answer

A)  channel intermediaries who perform wholesaling tasks that the manufacturer would otherwise have to perform 
B)  consumers who earn a price reduction for buying in bulk 
C)  intermediaries who pay their bills before they are due 
D)  manufacturers that agree to exclusive distribution contracts 
E)  the government market and other organizations that require bid proposals 
A)  channel intermediaries who perform wholesaling tasks that the manufacturer would otherwise have to perform 
B)  consumers who earn a price reduction for buying in bulk 
C)  intermediaries who pay their bills before they are due 
D)  manufacturers that agree to exclusive distribution contracts 
E)  the government market and other organizations that require bid proposals

Question 15

Explain the difference between elastic demand and inelastic demand.

Accepted Answer

Elastic demand occurs when a change in p

Question 16

Explain the concept of trial pricing. Why would a retailer implement this pricing strategy?

Accepted Answer

Trial pricing is used when a n

Question 17

Sellers should know that the less elastic the demand for their product, the more advantageous it is for them to ________.

Accepted Answer

A)  drop the price 
B)  raise the price 
C)  maintain the price 
D)  discontinue the item 
E)  bundle the item with another product 
A)  drop the price 
B)  raise the price 
C)  maintain the price 
D)  discontinue the item 
E)  bundle the item with another product

Question 18

Which of the following is NOT a type of pricing objective?

Accepted Answer

A)  elasticity 
B)  market share 
C)  profit 
D)  competitive effect 
E)  image enhancement 
A)  elasticity 
B)  market share 
C)  profit 
D)  competitive effect 
E)  image enhancement

Question 19

For a company that manufactures plastic signs, the printing press to make the signs, the manager's salary, and the utilities are all examples of ________.

Accepted Answer

A)  fixed costs 
B)  average fixed costs 
C)  variable costs 
D)  marginal costs 
E)  everyday costs 
A)  fixed costs 
B)  average fixed costs 
C)  variable costs 
D)  marginal costs 
E)  everyday costs

Question 20

Which of the following statements about price is true?

Accepted Answer

A)  Pricing is the least important marketing mix element. 
B)  Price is always a monetary value. 
C)  Price can mean exchange of nonmonetary goods or services. 
D)  Most consumers believe price has little influence on their purchase decisions. 
E)  Pricing is unaffected by changes in the business cycle. 
A)  Pricing is the least important marketing mix element. 
B)  Price is always a monetary value. 
C)  Price can mean exchange of nonmonetary goods or services. 
D)  Most consumers believe price has little influence on their purchase decisions. 
E)  Pricing is unaffected by changes in the business cycle.

Which of the following is a measure of customers' sensitivity to changes in price?

A demand curve never appears on a graph as a straight line.

In a(n) ________, all of the buyers know the highest price bid at any point in time.

________ is a new business strategy of offering a basic version of a product free of charge and then charging for upgraded versions of the product.

Which of the following occurs when price is inelastic?

When demand is ________, increases in price result in increases in total revenues, while decreases in price result in decreases in total revenue.

A firm is using a(n) ________ strategy when it introduces a product at a very low price to gain market share early on.

Explain the concept of price bundling. Why would a retailer implement this pricing strategy? Give one example of this strategy being implemented.

Value pricing is the opposite of cost-based pricing.

The simplest pricing method is break-even pricing: adding a standard markup to the cost of the product.

________ refers to the sale of two or more goods or services as a single package for one price.

The most common cost-based approach to pricing is ________.

Trade or functional discounts are offered by manufacturers to which of the following?

Explain the difference between elastic demand and inelastic demand.

Explain the concept of trial pricing. Why would a retailer implement this pricing strategy?

Sellers should know that the less elastic the demand for their product, the more advantageous it is for them to ________.

Which of the following is NOT a type of pricing objective?

For a company that manufactures plastic signs, the printing press to make the signs, the manager's salary, and the utilities are all examples of ________.

Which of the following statements about price is true?

Welcome to the World of Marketing: Create and Deliver Value

Global, Ethical, and Sustainable Marketing

Strategic Market Planning

Market Research

Marketing Analytics: Welcome to the Era of Big Data

Understand Consumer and Business Markets

Segmentation, Target Marketing, and Positioning

Product I: Innovation and New Product Development

Product Ii: Product Strategy, Branding, and Product Management

Deliver the Goods: Determine the Distribution Strategy

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Exam 10: Price: What Is the Value Proposition Worth

Which of the following is a measure of customers' sensitivity to changes in price?

A demand curve never appears on a graph as a straight line.

In a(n) ________, all of the buyers know the highest price bid at any point in time.

________ is a new business strategy of offering a basic version of a product free of charge and then charging for upgraded versions of the product.

Which of the following occurs when price is inelastic?

When demand is ________, increases in price result in increases in total revenues, while decreases in price result in decreases in total revenue.

A firm is using a(n) ________ strategy when it introduces a product at a very low price to gain market share early on.

Explain the concept of price bundling. Why would a retailer implement this pricing strategy? Give one example of this strategy being implemented.

Value pricing is the opposite of cost-based pricing.

The simplest pricing method is break-even pricing: adding a standard markup to the cost of the product.

________ refers to the sale of two or more goods or services as a single package for one price.

The most common cost-based approach to pricing is ________.

Trade or functional discounts are offered by manufacturers to which of the following?

Explain the difference between elastic demand and inelastic demand.

Explain the concept of trial pricing. Why would a retailer implement this pricing strategy?

Sellers should know that the less elastic the demand for their product, the more advantageous it is for them to ________.

Which of the following is NOT a type of pricing objective?

For a company that manufactures plastic signs, the printing press to make the signs, the manager's salary, and the utilities are all examples of ________.

Which of the following statements about price is true?

Welcome to the World of Marketing: Create and Deliver Value

Global, Ethical, and Sustainable Marketing

Strategic Market Planning

Market Research

Marketing Analytics: Welcome to the Era of Big Data

Understand Consumer and Business Markets

Segmentation, Target Marketing, and Positioning

Product I: Innovation and New Product Development

Product Ii: Product Strategy, Branding, and Product Management

Deliver the Goods: Determine the Distribution Strategy

Deliver the Customer Experience: Goods and Services Via Bricks and Clicks

Promotion I: Advertising and Sales Promotion

Promotion Ii: Social Media, Directdatabase Marketing, Personal Selling, and Public Relations

Filters