Question 1

Explain what is meant by price elasticity of demand.

Accepted Answer

The answer of Explain what is meant by price elasticity...

Question 2

In conducting an assessment of her accounting firm, Paige discovers the following annual results: average charge per customer = $250; rent = $12,000; total billings = $150,000; employee compensation and benefits = $60,000; and other costs = $110,000. Given these results, Paige's profits would equal

Accepted Answer

A) a loss of $20,000. 
B) a loss of $32,000. 
C) $28,000. 
D) $40,000. 
E) $222,000. 
A) a loss of $20,000. 
B) a loss of $32,000. 
C) $28,000. 
D) $40,000. 
E) $222,000.

Question 3

Sellers using nonprice competition are not concerned with prices charged by competitors.

Accepted Answer

A) True 
 B)False

Question 4

Discuss the role of product costs in setting prices.

Accepted Answer

Product costs play a crucial role in set

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

The idea behind prestige demand is that many prestige products seem to sell better at a high price than at a low price.

Accepted Answer

A) True 
 B)False

Question 7

When marginal cost is equal to marginal revenue, the firm should

Accepted Answer

A) produce more to increase profits. 
B) produce less to decrease total costs. 
C) stop producing additional units to maximize profits. 
D) provide discounts to encourage purchases. 
E) intensify distribution to increase sales. 
A) produce more to increase profits. 
B) produce less to decrease total costs. 
C) stop producing additional units to maximize profits. 
D) provide discounts to encourage purchases. 
E) intensify distribution to increase sales.

Question 8

If the terms of a business exchange are 2/10 net 30, this means that the transaction

Accepted Answer

A) involves a cumulative discount if paid in 30 days. 
B) involves a noncumulative discount. 
C) offers a discount if the buyer lives within a ten-mile radius. 
D) price does not include the cost of freight. 
E) involves a cash discount if paid within ten days. 
A) involves a cumulative discount if paid in 30 days. 
B) involves a noncumulative discount. 
C) offers a discount if the buyer lives within a ten-mile radius. 
D) price does not include the cost of freight. 
E) involves a cash discount if paid within ten days.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Barter is the oldest form of exchange.

Accepted Answer

A) True 
 B)False

Question 11

Demand is best determined by a top management committee.

Accepted Answer

A) True 
 B)False

Question 12

When marketers at Consolidated Mustard Company tried to determine demand for their product, they found that at 50 cents, consumers wanted 2,000 jars; at $1.00, they wanted 6,000 jars; and at $1.50, they wanted 4,000 jars. What can Consolidated conclude?

Accepted Answer

A) Consolidated did poor market demand research. 
B) Consolidated has an elastic product. 
C) Consolidated has an inelastic product. 
D) Consolidated mustard is a prestige good. 
E) Consolidated mustard has a normal demand curve. 
A) Consolidated did poor market demand research. 
B) Consolidated has an elastic product. 
C) Consolidated has an inelastic product. 
D) Consolidated mustard is a prestige good. 
E) Consolidated mustard has a normal demand curve.

Question 13

Sellers that emphasize distinctive product features to encourage brand preferences among customers are practicing

Accepted Answer

A) product competition. 
B) nonprice competition. 
C) brand differentiation. 
D) price competition. 
E) competitor differentiation. 
A) product competition. 
B) nonprice competition. 
C) brand differentiation. 
D) price competition. 
E) competitor differentiation.

Question 14

Transfer pricing involves the sale of a product to another unit within the same organization.

Accepted Answer

A) True 
 B)False

Question 15

Setting prices for business customers is very similar to setting prices for consumers.

Accepted Answer

A) True 
 B)False

Question 16

Dividing the percentage change in quantity demanded by the percentage change in price gives the

Accepted Answer

A) prestige demand curve. 
B) breakeven point. 
C) marginal cost curve. 
D) price sensitivity curve. 
E) price elasticity of demand. 
A) prestige demand curve. 
B) breakeven point. 
C) marginal cost curve. 
D) price sensitivity curve. 
E) price elasticity of demand.

Question 17

Marketers should set prices consistent with marketing goals, not with the corporate mission.

Accepted Answer

A) True 
 B)False

Question 18

The oldest form of exchange-trading of products-is known as

Accepted Answer

A) credit. 
B) buying. 
C) purchasing. 
D) barter. 
E) pricing. 
A) credit. 
B) buying. 
C) purchasing. 
D) barter. 
E) pricing.

Question 19

Price should be defined in terms of money only.

Accepted Answer

A) True 
 B)False

Question 20

The more experience the customer has with a product, the more he or she relies on external reference prices.

Accepted Answer

A) True 
 B)False

Exam 20: Pricing Concepts

Explain what is meant by price elasticity of demand.

In conducting an assessment of her accounting firm, Paige discovers the following annual results: average charge per customer = $250; rent = $12,000; total billings = $150,000; employee compensation and benefits = $60,000; and other costs = $110,000. Given these results, Paige's profits would equal

Sellers using nonprice competition are not concerned with prices charged by competitors.

Discuss the role of product costs in setting prices.

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

The idea behind prestige demand is that many prestige products seem to sell better at a high price than at a low price.

When marginal cost is equal to marginal revenue, the firm should

If the terms of a business exchange are 2/10 net 30, this means that the transaction

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

Barter is the oldest form of exchange.

Demand is best determined by a top management committee.

When marketers at Consolidated Mustard Company tried to determine demand for their product, they found that at 50 cents, consumers wanted 2,000 jars; at $1.00, they wanted 6,000 jars; and at $1.50, they wanted 4,000 jars. What can Consolidated conclude?

Sellers that emphasize distinctive product features to encourage brand preferences among customers are practicing

Transfer pricing involves the sale of a product to another unit within the same organization.

Setting prices for business customers is very similar to setting prices for consumers.

Dividing the percentage change in quantity demanded by the percentage change in price gives the

Marketers should set prices consistent with marketing goals, not with the corporate mission.

The oldest form of exchange-trading of products-is known as

Price should be defined in terms of money only.

The more experience the customer has with a product, the more he or she relies on external reference prices.

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