Question 1

Maximization of sales should never be a long-term objective.

Accepted Answer

A) True 
 B)False

Question 2

Under which of the following conditions will companies with low market share be most likely to fail?

Accepted Answer

A) competing in a slow-growth industry 
B) competing in an industry that makes frequently purchased items 
C) competing in an industry with few product changes 
D) competing in an industry requiring market power and economies of scale 
A) competing in a slow-growth industry 
B) competing in an industry that makes frequently purchased items 
C) competing in an industry with few product changes 
D) competing in an industry requiring market power and economies of scale

Question 3

The advertisements for Bernard Hinault brand bicycles claim that it is the most expensive bicycle in the world.Which type of pricing is this?

Accepted Answer

A) target return 
B) prestige 
C) market share 
D) profit maximization 
A) target return 
B) prestige 
C) market share 
D) profit maximization

Question 4

Imagine you're planning an after-symphony fundraising party,and you need a life-size grand piano cake.Or,you are a developer proposing a new shopping centre to a group of investors,and you want to serve a cake shaped like an architectural rendition of the centre.Is this impossible? No,you just need to contact Cecilia Villaveces Cakes.She actually built a life-size grand piano for a major gala.You can expect to pay anywhere from $75 to $10,000 for one of Cecilia's artistic creations,depending on complexity of design and size.She uses only the best ingredients,and no two cakes are ever quite alike.
-Refer to Specialty Cakes.Which of the following is the best example of a fixed cost for Cecilia Villaveces Cakes?

Accepted Answer

A) eggs,butter,sugar 
B) delivery costs 
C) part-time employees 
D) food preparation licences 
A) eggs,butter,sugar 
B) delivery costs 
C) part-time employees 
D) food preparation licences

Question 5

Grove City Furniture Company has recently moved to a new,larger location.At this new location,it has been unable to attract sufficient customers.Frankie Alonza,its owner,does not have the cash to pay the current loan instalment due on the building and inventory.Alonza has decided to reduce all merchandise prices by at least 50 percent for a weekend sale so he can earn enough to make his loan payment.How can his pricing objective be classified?

Accepted Answer

A) as market share maximization 
B) as satisfactory profits 
C) as sales maximization 
D) as target ROI. 
A) as market share maximization 
B) as satisfactory profits 
C) as sales maximization 
D) as target ROI.

Question 6

Status quo pricing objectives indicate that prices are adjusted to meet the competition.

Accepted Answer

A) True 
 B)False

Question 7

When a seller determines the selling price by adding to cost an amount for profit and expenses not previously accounted for,which type of pricing is the seller using?

Accepted Answer

A) profit maximization 
B) demand oriented 
C) target return 
D) markup 
A) profit maximization 
B) demand oriented 
C) target return 
D) markup

Question 8

Adequate distribution for a new product is often obtained by reducing the size of the profit margin for its resellers.

Accepted Answer

A) True 
 B)False

Question 9

For convenience,pricing objectives can be divided into three categories.What are they?

Accepted Answer

A) refundable,competitive,and attainable 
B) perceived,actual,and unique-situational 
C) differentiated,niche,and undifferentiated 
D) profit oriented,sales oriented,and status quo 
A) refundable,competitive,and attainable 
B) perceived,actual,and unique-situational 
C) differentiated,niche,and undifferentiated 
D) profit oriented,sales oriented,and status quo

Question 10

What are yield management systems used for?

Accepted Answer

A) to determine the availability of product substitutes in complex industries that are experiencing rapid change 
B) to profitably fill unused capacity 
C) to predict necessary service levels to achieve revenue goals 
D) to create elastic demand for low-involvement products 
A) to determine the availability of product substitutes in complex industries that are experiencing rapid change 
B) to profitably fill unused capacity 
C) to predict necessary service levels to achieve revenue goals 
D) to create elastic demand for low-involvement products

Question 11

In which direction do most demand curves slope?

Accepted Answer

A) horizontally 
B) upward and to the right 
C) downward and to the left 
D) downward and to the right 
A) horizontally 
B) upward and to the right 
C) downward and to the left 
D) downward and to the right

Question 12

Variable costs vary with changes in the level of output,whereas marginal costs do not vary as output changes.

Accepted Answer

A) True 
 B)False

Question 13

The American Girl catalogue began as a concept to introduce today's girls to girls who lived in the past.Each historically accurate doll is carefully crafted and dressed and has books to describe her life.For example,Kristen is an 1854 pioneer girl who is growing up in Minnesota.Her story begins with her long sea voyage from Sweden.The basic doll dressed in a calico dress and striped apron plus the hardcover story of how she got to Minnesota costs $90.Six more hardback books of Kristen's life are available for $74.95.Kristen's nightgown costs $20,and a matching one for the doll owner is an additional $38.Buy both together and the price is only $50.A hand-painted wooden bed and trunk for Kristen are available for $213.Shipping costs vary with the price of the merchandise ordered.
-Refer to American Girl Doll.In terms of producing the doll and its accessories,what type of cost is the calico fabric used to make Kristen's dress?

Accepted Answer

A) a markup cost 
B) a variable cost 
C) a fixed cost 
D) a derived cost 
A) a markup cost 
B) a variable cost 
C) a fixed cost 
D) a derived cost

Question 14

Bill Needles makes and sells customized silver belt buckles for $225 each.He has determined that his fixed costs are $8,000,and his average variable costs per buckle are $145.
-Refer to Bill Needles.What is his fixed cost contribution per buckle?

Accepted Answer

A) $45 
B) $80 
C) $88.89 
D) $170 
A) $45 
B) $80 
C) $88.89 
D) $170

Question 15

The American Girl catalogue began as a concept to introduce today's girls to girls who lived in the past.Each historically accurate doll is carefully crafted and dressed and has books to describe her life.For example,Kristen is an 1854 pioneer girl who is growing up in Minnesota.Her story begins with her long sea voyage from Sweden.The basic doll dressed in a calico dress and striped apron plus the hardcover story of how she got to Minnesota costs $90.Six more hardback books of Kristen's life are available for $74.95.Kristen's nightgown costs $20,and a matching one for the doll owner is an additional $38.Buy both together and the price is only $50.A hand-painted wooden bed and trunk for Kristen are available for $213.Shipping costs vary with the price of the merchandise ordered.
-Refer to American Girl Doll.In terms of the costs of producing the doll and its accessories,what is the salary of the graphic designer who does the layout for the American Girl catalogue?

Accepted Answer

A) a variable cost 
B) a fixed cost 
C) a derived cost 
D) an elastic cost 
A) a variable cost 
B) a fixed cost 
C) a derived cost 
D) an elastic cost

Question 16

The American Girl catalogue began as a concept to introduce today's girls to girls who lived in the past.Each historically accurate doll is carefully crafted and dressed and has books to describe her life.For example,Kristen is an 1854 pioneer girl who is growing up in Minnesota.Her story begins with her long sea voyage from Sweden.The basic doll dressed in a calico dress and striped apron plus the hardcover story of how she got to Minnesota costs $90.Six more hardback books of Kristen's life are available for $74.95.Kristen's nightgown costs $20,and a matching one for the doll owner is an additional $38.Buy both together and the price is only $50.A hand-painted wooden bed and trunk for Kristen are available for $213.Shipping costs vary with the price of the merchandise ordered.
-Refer to American Girl Doll.American Girl is the primary seller of historically accurate dolls with accompanying books in a market where there is very little competition.It has no cash flow problems and is not interested in maximizing its sales.From this information,you should know American Girl has which type of pricing objectives?

Accepted Answer

A) status quo 
B) psychological 
C) profit oriented 
D) supply derived 
A) status quo 
B) psychological 
C) profit oriented 
D) supply derived

Question 17

When pricing goals are mainly sales oriented,cost considerations are usually subordinated to demand considerations.

Accepted Answer

A) True 
 B)False

Question 18

Sales-oriented pricing objectives are either based on market share or dollar or unit sales.

Accepted Answer

A) True 
 B)False

Question 19

Break-even analysis determines what sales volume must be reached for a product before the company's total revenue equals total costs.

Accepted Answer

A) True 
 B)False

Question 20

Revenue

Accepted Answer

A) equals price minus costs. 
B) equals return on investment. 
C) equals profit. 
D) equals price of goods times quantity sold. 
A) equals price minus costs. 
B) equals return on investment. 
C) equals profit. 
D) equals price of goods times quantity sold.

Maximization of sales should never be a long-term objective.

Under which of the following conditions will companies with low market share be most likely to fail?

The advertisements for Bernard Hinault brand bicycles claim that it is the most expensive bicycle in the world.Which type of pricing is this?

Status quo pricing objectives indicate that prices are adjusted to meet the competition.

When a seller determines the selling price by adding to cost an amount for profit and expenses not previously accounted for,which type of pricing is the seller using?

Adequate distribution for a new product is often obtained by reducing the size of the profit margin for its resellers.

For convenience,pricing objectives can be divided into three categories.What are they?

What are yield management systems used for?

In which direction do most demand curves slope?

Variable costs vary with changes in the level of output,whereas marginal costs do not vary as output changes.

Bill Needles makes and sells customized silver belt buckles for $225 each.He has determined that his fixed costs are $8,000,and his average variable costs per buckle are $145. -Refer to Bill Needles.What is his fixed cost contribution per buckle?

When pricing goals are mainly sales oriented,cost considerations are usually subordinated to demand considerations.

Sales-oriented pricing objectives are either based on market share or dollar or unit sales.

Break-even analysis determines what sales volume must be reached for a product before the company's total revenue equals total costs.

Revenue

An Overview of Marketing

The Marketing Environment, social Responsibility, and Ethics

Strategic Planning for Competitive Advantage

Decision Support Systems and Marketing Research

Consumer Decision Making

Business Marketing

Segmenting, targeting, and Positioning

Customer Relationship Management CRM

Product Concepts

Developing and Managing Products

Services and Nonprofit Organization Marketing

Marketing Channels and Supply Chain Management

Retailing

Integrated Marketing Communication

Advertising, public Relations, and Direct Response

Social Media and Marketing

Sales Promotion and Personal Selling

Setting the Right Price

Developing a Global Vision

Filters

Exam 18: Pricing Concepts

Maximization of sales should never be a long-term objective.

Under which of the following conditions will companies with low market share be most likely to fail?

The advertisements for Bernard Hinault brand bicycles claim that it is the most expensive bicycle in the world.Which type of pricing is this?

Status quo pricing objectives indicate that prices are adjusted to meet the competition.

When a seller determines the selling price by adding to cost an amount for profit and expenses not previously accounted for,which type of pricing is the seller using?

Adequate distribution for a new product is often obtained by reducing the size of the profit margin for its resellers.

For convenience,pricing objectives can be divided into three categories.What are they?

What are yield management systems used for?

In which direction do most demand curves slope?

Variable costs vary with changes in the level of output,whereas marginal costs do not vary as output changes.

Bill Needles makes and sells customized silver belt buckles for $225 each.He has determined that his fixed costs are $8,000,and his average variable costs per buckle are $145. -Refer to Bill Needles.What is his fixed cost contribution per buckle?

When pricing goals are mainly sales oriented,cost considerations are usually subordinated to demand considerations.

Sales-oriented pricing objectives are either based on market share or dollar or unit sales.

Break-even analysis determines what sales volume must be reached for a product before the company's total revenue equals total costs.

Revenue

An Overview of Marketing

The Marketing Environment, social Responsibility, and Ethics

Strategic Planning for Competitive Advantage

Decision Support Systems and Marketing Research

Consumer Decision Making

Business Marketing

Segmenting, targeting, and Positioning

Customer Relationship Management CRM

Product Concepts

Developing and Managing Products

Services and Nonprofit Organization Marketing

Marketing Channels and Supply Chain Management

Retailing

Integrated Marketing Communication

Advertising, public Relations, and Direct Response

Social Media and Marketing

Sales Promotion and Personal Selling

Setting the Right Price

Developing a Global Vision

Filters