Question 1

According to the profit equation,profit equals

Accepted Answer

A) Total cost + Total revenue. 
B) Total revenue − Total cost. 
C) Marginal revenue − Marginal cost. 
D) Price × Quantity. 
E) Total revenue + Marginal cost. 
A) Total cost + Total revenue. 
B) Total revenue − Total cost. 
C) Marginal revenue − Marginal cost. 
D) Price × Quantity. 
E) Total revenue + Marginal cost.

Question 2

An online movie streaming service charges $14.99 per month for its basic package.However,when a competitor introduced the same service at $13.99,the firm dropped its price to $13.99.The firm most likely made this price reduction in an attempt to

Accepted Answer

A) decrease revenue but increase profit. 
B) increase profit by increasing revenue. 
C) maintain market share. 
D) decrease market share. 
E) increase efficiency. 
A) decrease revenue but increase profit. 
B) increase profit by increasing revenue. 
C) maintain market share. 
D) decrease market share. 
E) increase efficiency.

Question 3

Three different objectives relate to a firm's profit,each of which have different implications for pricing strategy.One of these is

Accepted Answer

A) accumulating profits. 
B) reinvesting profits. 
C) redistributing profits. 
D) maximizing gross margin. 
E) achieving a target return. 
A) accumulating profits. 
B) reinvesting profits. 
C) redistributing profits. 
D) maximizing gross margin. 
E) achieving a target return.

Question 4

Factors other than price affect demand.What are they and how do they work?

Accepted Answer

Price is not the complete story in estim

Question 5

When estimating demand,price is not the only factor to be considered.Three other elements are emphasized by economists,one of which is

Accepted Answer

A) consumer tastes. 
B) legislative changes. 
C) size of the target market. 
D) current political stability. 
E) promotional methods. 
A) consumer tastes. 
B) legislative changes. 
C) size of the target market. 
D) current political stability. 
E) promotional methods.

Question 6

At one point,people were willing to pay hundreds of dollars on eBay for a Beanie Baby toy that originally cost a small fraction of that.Today,those same Beanie Babies can be found at garage sales for less than a dollar apiece.This is most likely due to

Accepted Answer

A) faulty craftsmanship in later production batches. 
B) a sharp downturn in the economy. 
C) the new,more nostalgic fad of bobblehead dolls. 
D) too many counterfeit Beanie Babies entering the country. 
E) a product becoming a fad and then losing its fad appeal. 
A) faulty craftsmanship in later production batches. 
B) a sharp downturn in the economy. 
C) the new,more nostalgic fad of bobblehead dolls. 
D) too many counterfeit Beanie Babies entering the country. 
E) a product becoming a fad and then losing its fad appeal.

Question 7

Figure 13-7
  
-The break-even chart for a picture frame store in Figure 13-7 above shows that by selling 800 pictures,the store will

Accepted Answer

A) break even. 
B) earn a profit. 
C) incur a loss. 
D) have no fixed costs. 
E) have no variable costs. 
A) break even. 
B) earn a profit. 
C) incur a loss. 
D) have no fixed costs. 
E) have no variable costs.

Question 8

The competitive market situation in which many sellers compete on nonprice factors is referred to as

Accepted Answer

A) a pure monopoly. 
B) an oligopoly. 
C) pure competition. 
D) monopolistic competition. 
E) monopolistic oligopoly. 
A) a pure monopoly. 
B) an oligopoly. 
C) pure competition. 
D) monopolistic competition. 
E) monopolistic oligopoly.

Question 9

Figure 13-7
  
-In the break-even chart in Figure 13-7 above,the line CG represents the firm's

Accepted Answer

A) fixed costs. 
B) break-even point. 
C) variable costs. 
D) profit. 
E) total revenue. 
A) fixed costs. 
B) break-even point. 
C) variable costs. 
D) profit. 
E) total revenue.

Question 10

While pricing objectives frequently reflect corporate goals,pricing constraints often relate to

Accepted Answer

A) stockholder demands. 
B) political ideology. 
C) conditions existing in the marketplace. 
D) an organization's code of ethics. 
E) the financial realities within the organization itself. 
A) stockholder demands. 
B) political ideology. 
C) conditions existing in the marketplace. 
D) an organization's code of ethics. 
E) the financial realities within the organization itself.

Question 11

Which of the following statements would most likely be spoken while determining cost,volume,and profit relationships in the price-setting process?

Accepted Answer

A) "In order to break even,we will need to sell at least 500,000 units." 
B) "We have to try to achieve an 8 percent profit share." 
C) "The starting price should be $4.99 and we can raise the price again in six months." 
D) "But,if we increase the price even by $1,how many customers will we lose?" 
E) "We should probably price the extra-large version somewhere between $600 and $650." 
A) "In order to break even,we will need to sell at least 500,000 units." 
B) "We have to try to achieve an 8 percent profit share." 
C) "The starting price should be $4.99 and we can raise the price again in six months." 
D) "But,if we increase the price even by $1,how many customers will we lose?" 
E) "We should probably price the extra-large version somewhere between $600 and $650."

Question 12

Pure competition is the competitive situation in which

Accepted Answer

A) many sellers follow market price for identical,commodity products. 
B) one seller sets the price for a unique product. 
C) few sellers are sensitive to one another's prices. 
D) many sellers compete on nonprice factors. 
E) one or few sellers compete solely on nonprice factors. 
A) many sellers follow market price for identical,commodity products. 
B) one seller sets the price for a unique product. 
C) few sellers are sensitive to one another's prices. 
D) many sellers compete on nonprice factors. 
E) one or few sellers compete solely on nonprice factors.

Question 13

Which of the following is an example of a price?

Accepted Answer

A) college tuition 
B) operating costs 
C) liquidity 
D) value 
E) stockholders' equity 
A) college tuition 
B) operating costs 
C) liquidity 
D) value 
E) stockholders' equity

Question 14

A firm's profit equals

Accepted Answer

A) Total cost + Total revenue or [(Fixed cost + Variable cost)+ (Unit price × Quantity sold)]. 
B) Total revenue − Total cost or [(Unit price × Quantity sold)− (Fixed cost + Variable cost)]. 
C) Total cost − Marginal cost or [(Fixed cost + Variable cost)− (Unit price × Quantity sold)]. 
D) Total cost − Variable cost or [(Fixed cost + Variable cost)− (Unit price × Quantity sol
D) ]. 
E) Total revenue/Total cost or [(Unit price × Quantity sold)÷ (Fixed cost + Variable cost)]. 
A) Total cost + Total revenue or [(Fixed cost + Variable cost)+ (Unit price × Quantity sold)]. 
B) Total revenue − Total cost or [(Unit price × Quantity sold)− (Fixed cost + Variable cost)]. 
C) Total cost − Marginal cost or [(Fixed cost + Variable cost)− (Unit price × Quantity sold)]. 
D) Total cost − Variable cost or [(Fixed cost + Variable cost)− (Unit price × Quantity sol
D) ]. 
E) Total revenue/Total cost or [(Unit price × Quantity sold)÷ (Fixed cost + Variable cost)].

Question 15

Elastic demand exists when

Accepted Answer

A) a small percentage decrease in price produces a smaller percentage increase in quantity demanded. 
B) a small percentage decrease in price produces a larger percentage increase in quantity demanded. 
C) an increase in price causes a larger increase in quantity demanded. 
D) the quantity demanded remains the same regardless of level of price. 
E) no change in price produces a small percentage change in quantity demanded. 
A) a small percentage decrease in price produces a smaller percentage increase in quantity demanded. 
B) a small percentage decrease in price produces a larger percentage increase in quantity demanded. 
C) an increase in price causes a larger increase in quantity demanded. 
D) the quantity demanded remains the same regardless of level of price. 
E) no change in price produces a small percentage change in quantity demanded.

Question 16

The formula Total revenue − Total cost or [(Unit price × Quantity sold)− (Fixed cost + Variable cost)] represents

Accepted Answer

A) the value equation. 
B) the sales ratio. 
C) average revenue. 
D) the break-even point. 
E) the profit equation. 
A) the value equation. 
B) the sales ratio. 
C) average revenue. 
D) the break-even point. 
E) the profit equation.

Question 17

Figure 13-7
  
-In the break-even chart in Figure 13-7 above,the triangular area FBE represents the firm's

Accepted Answer

A) fixed costs. 
B) break-even point. 
C) variable costs. 
D) profit. 
E) total revenue. 
A) fixed costs. 
B) break-even point. 
C) variable costs. 
D) profit. 
E) total revenue.

Question 18

What is the difference between fixed costs and variable costs?

Accepted Answer

Fixed cost is the sum of the expenses of

Question 19

A reference value involves comparing the costs and benefits of

Accepted Answer

A) substitute items. 
B) items of equal or greater value. 
C) products with which a consumer is familiar and items the consumer has not seen or used before. 
D) items from one particular manufacturer or distributor. 
E) intangible items. 
A) substitute items. 
B) items of equal or greater value. 
C) products with which a consumer is familiar and items the consumer has not seen or used before. 
D) items from one particular manufacturer or distributor. 
E) intangible items.

Question 20

Specifying the role of price in an organization's marketing and strategic plans is referred to as

Accepted Answer

A) choosing a pricing plan. 
B) defining a profit mission. 
C) developing pricing constraints. 
D) setting pricing objectives. 
E) determining the list or quoted price. 
A) choosing a pricing plan. 
B) defining a profit mission. 
C) developing pricing constraints. 
D) setting pricing objectives. 
E) determining the list or quoted price.

Exam 13: Building the Price Foundation

According to the profit equation,profit equals

An online movie streaming service charges $14.99 per month for its basic package.However,when a competitor introduced the same service at $13.99,the firm dropped its price to $13.99.The firm most likely made this price reduction in an attempt to

Three different objectives relate to a firm's profit,each of which have different implications for pricing strategy.One of these is

Factors other than price affect demand.What are they and how do they work?

When estimating demand,price is not the only factor to be considered.Three other elements are emphasized by economists,one of which is

At one point,people were willing to pay hundreds of dollars on eBay for a Beanie Baby toy that originally cost a small fraction of that.Today,those same Beanie Babies can be found at garage sales for less than a dollar apiece.This is most likely due to

Figure 13-7 -The break-even chart for a picture frame store in Figure 13-7 above shows that by selling 800 pictures,the store will

The competitive market situation in which many sellers compete on nonprice factors is referred to as

Figure 13-7 -In the break-even chart in Figure 13-7 above,the line CG represents the firm's

While pricing objectives frequently reflect corporate goals,pricing constraints often relate to

Which of the following statements would most likely be spoken while determining cost,volume,and profit relationships in the price-setting process?

Pure competition is the competitive situation in which

Which of the following is an example of a price?

A firm's profit equals

Elastic demand exists when

The formula Total revenue − Total cost or [(Unit price × Quantity sold)− (Fixed cost + Variable cost)] represents

Figure 13-7 -In the break-even chart in Figure 13-7 above,the triangular area FBE represents the firm's

What is the difference between fixed costs and variable costs?

A reference value involves comparing the costs and benefits of

Specifying the role of price in an organization's marketing and strategic plans is referred to as

Creating Customer Relationships and Value Through Marketing

Developing Successful Organizational and Marketing Strategies

Scanning the Marketing Environment

Ethical and Social Responsibility for Sustainable Marketing

Understanding Consumer Behavior

Understanding Organizations As Customers

Understanding and Reaching Global Consumers and Markets

Marketing Research: From Customer Insights to Actions

Market Segmentation, targeting, and Positioning

Developing New Products and Services

Managing Successful Products, services, and Brands

Services Marketing

Arriving at the Final Price

Managing Marketing Channels and Supply Chains

Retailing and Wholesaling

Integrated Marketing Communications and Direct Marketing

Advertising,sales Promotion,and Public Relations

Using Social Media and Mobile Marketing to Connect With Consumers

Personal Selling and Sales Management

Implementing Interactive and Multichannel Marketing

Pulling It All Together: the Strategic Marketing Process

Writing Successful Marketing and Business Plans: Tips and Guidelines

Financial Statements and Ratios

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