Question 1

A retailer pays a wholesaler $24.00 for an item and then sells it with a 25 percent markup.The retailer's selling price is

Accepted Answer

A) $32.00. 
B) $56.00. 
C) $48.00. 
D) $30.00. 
E) None of these answers is correct. 
A) $32.00. 
B) $56.00. 
C) $48.00. 
D) $30.00. 
E) None of these answers is correct.

Question 2

A large supermarket chain purchases a box of cereal from a food wholesaler.If the supermarket chain uses a markup of 20 percent on its selling price of $2.85,what is the price the supermarket chain paid to the food wholesaler?

Accepted Answer

A) $2.12 
B) $2.28 
C) $2.45 
D) $2.55 
E) $2.67 
A) $2.12 
B) $2.28 
C) $2.45 
D) $2.55 
E) $2.67

Question 3

Even if a firm's average variable cost remains constant per unit,its average cost will increase as output increases.

Accepted Answer

A) True 
 B)False

Question 4

A firm's break-even point is that point at which

Accepted Answer

A) maximum profit is earned. 
B) total variable cost just equals total revenue. 
C) total profit just equals total cost. 
D) total cost just equals total revenue. 
E) None of these answers is correct. 
A) maximum profit is earned. 
B) total variable cost just equals total revenue. 
C) total profit just equals total cost. 
D) total cost just equals total revenue. 
E) None of these answers is correct.

Question 5

Which of the following does NOT change with an increase in output?

Accepted Answer

A) total variable cost 
B) total fixed cost 
C) total cost 
D) average total cost per unit 
E) average fixed cost per unit 
A) total variable cost 
B) total fixed cost 
C) total cost 
D) average total cost per unit 
E) average fixed cost per unit

Question 6

When setting prices,the marketing manager should consider the firm's demand curve,or else the price may not even cover the firm's total cost.

Accepted Answer

A) True 
 B)False

Question 7

One disadvantage of average-cost pricing is that

Accepted Answer

A) average-cost pricing does not consider historical values. 
B) average-cost pricing is a highly complicated method. 
C) the average cost is rarely useful information in making pricing decisions. 
D) it is easy to lose money with average-cost pricing. 
E) average-cost pricing does not help understand how costs operate at different levels of output. 
A) average-cost pricing does not consider historical values. 
B) average-cost pricing is a highly complicated method. 
C) the average cost is rarely useful information in making pricing decisions. 
D) it is easy to lose money with average-cost pricing. 
E) average-cost pricing does not help understand how costs operate at different levels of output.

Question 8

Total fixed cost

Accepted Answer

A) is the sum of all expenses that are closely related to output. 
B) is the sum of those costs that do not change in total no matter how much is produced. 
C) may vary in the short run but is more or less fixed in the long run. 
D) is the sum of all costs of manufacturing and distributing a product. 
E) would be zero if the quantity produced were zero. 
A) is the sum of all expenses that are closely related to output. 
B) is the sum of those costs that do not change in total no matter how much is produced. 
C) may vary in the short run but is more or less fixed in the long run. 
D) is the sum of all costs of manufacturing and distributing a product. 
E) would be zero if the quantity produced were zero.

Question 9

Demand-backward pricing involves a producer estimating an acceptable final consumer price and working backward to determine what the producer can charge in the channel.

Accepted Answer

A) True 
 B)False

Question 10

Michael Soles-owner of Soles Shoe Store-recently discovered that shoe stores in his trading area have an average markup of 40 percent.Upon investigation,Michael found that his average markup is $15 on shoes that he sells for $45.This suggests that

Accepted Answer

A) Michael has higher-than-average costs. 
B) Michael is pricing his products higher than his competitors. 
C) Michael is taking a smaller average markup than his competitors. 
D) Michael has a relatively high stockturn rate. 
E) Michael's markups in dollar amounts are about the same as his competitors'. 
A) Michael has higher-than-average costs. 
B) Michael is pricing his products higher than his competitors. 
C) Michael is taking a smaller average markup than his competitors. 
D) Michael has a relatively high stockturn rate. 
E) Michael's markups in dollar amounts are about the same as his competitors'.

Question 11

If the price per unit is $1.00 and the average variable cost per unit is 60 cents,the fixed cost contribution per unit is $1.40.

Accepted Answer

A) True 
 B)False

Question 12

An advantage of average-cost pricing is that it considers competitors' costs and prices.

Accepted Answer

A) True 
 B)False

Question 13

A markup chain can be used to calculate the price structure in a whole channel.

Accepted Answer

A) True 
 B)False

Question 14

When customers have to pay the bill themselves,they are likely to be more price sensitive.

Accepted Answer

A) True 
 B)False

Question 15

The form of pricing in which customers pay on a periodic basis for access to a product is referred to as

Accepted Answer

A) subscription pricing. 
B) price lining. 
C) leader pricing. 
D) psychological pricing. 
E) bait pricing. 
A) subscription pricing. 
B) price lining. 
C) leader pricing. 
D) psychological pricing. 
E) bait pricing.

Question 16

Subscription pricing is popular because it gives sellers a regular and predictable stream of revenue.

Accepted Answer

A) True 
 B)False

Question 17

________ are costs that a customer faces by buying a product that is different from what has been purchased or used in the past.

Accepted Answer

A) Marginal costs 
B) First-mover costs 
C) Switching costs 
D) Pioneering costs 
E) Opportunity costs 
A) Marginal costs 
B) First-mover costs 
C) Switching costs 
D) Pioneering costs 
E) Opportunity costs

Question 18

Fly-Right Travel Agency arranges vacation packages to Disney World in Florida.The price includes airfare,a rental car,deluxe accommodations,and tickets to Disney World and other attractions.Fly-Right is using

Accepted Answer

A) product-bundle pricing. 
B) complementary product pricing. 
C) full-line pricing. 
D) bid pricing. 
E) demand-backward pricing. 
A) product-bundle pricing. 
B) complementary product pricing. 
C) full-line pricing. 
D) bid pricing. 
E) demand-backward pricing.

Question 19

At zero output,total variable cost is

Accepted Answer

A) higher than total fixed cost. 
B) equal to total fixed cost. 
C) unity. 
D) zero. 
E) substantial. 
A) higher than total fixed cost. 
B) equal to total fixed cost. 
C) unity. 
D) zero. 
E) substantial.

Question 20

Marginal analysis

Accepted Answer

A) can be very useful if a firm's pricing objective is profit maximization. 
B) focuses on the last unit that will be sold. 
C) can be used to find the most profitable price and quantity. 
D) can help find the price that results in the greatest difference between total revenue and total cost. 
E) All these answers are correct. 
A) can be very useful if a firm's pricing objective is profit maximization. 
B) focuses on the last unit that will be sold. 
C) can be used to find the most profitable price and quantity. 
D) can help find the price that results in the greatest difference between total revenue and total cost. 
E) All these answers are correct.

A retailer pays a wholesaler $24.00 for an item and then sells it with a 25 percent markup.The retailer's selling price is

A large supermarket chain purchases a box of cereal from a food wholesaler.If the supermarket chain uses a markup of 20 percent on its selling price of $2.85,what is the price the supermarket chain paid to the food wholesaler?

Even if a firm's average variable cost remains constant per unit,its average cost will increase as output increases.

A firm's break-even point is that point at which

Which of the following does NOT change with an increase in output?

When setting prices,the marketing manager should consider the firm's demand curve,or else the price may not even cover the firm's total cost.

One disadvantage of average-cost pricing is that

Total fixed cost

Demand-backward pricing involves a producer estimating an acceptable final consumer price and working backward to determine what the producer can charge in the channel.

Michael Soles-owner of Soles Shoe Store-recently discovered that shoe stores in his trading area have an average markup of 40 percent.Upon investigation,Michael found that his average markup is $15 on shoes that he sells for $45.This suggests that

If the price per unit is $1.00 and the average variable cost per unit is 60 cents,the fixed cost contribution per unit is $1.40.

An advantage of average-cost pricing is that it considers competitors' costs and prices.

A markup chain can be used to calculate the price structure in a whole channel.

When customers have to pay the bill themselves,they are likely to be more price sensitive.

The form of pricing in which customers pay on a periodic basis for access to a product is referred to as

Subscription pricing is popular because it gives sellers a regular and predictable stream of revenue.

________ are costs that a customer faces by buying a product that is different from what has been purchased or used in the past.

Fly-Right Travel Agency arranges vacation packages to Disney World in Florida.The price includes airfare,a rental car,deluxe accommodations,and tickets to Disney World and other attractions.Fly-Right is using

At zero output,total variable cost is

Marginal analysis

Marketings Value to Consumers, Firms, and Society

Marketing Strategy Planning

Evaluating Opportunities in the Changing Market Environment

Focusing Marketing Strategy With Segmentation and Positioning

Final Consumers and Their Buying Behavior

Business and Organizational Customers and Their Buying Behavior

Improving Decisions With Marketing Information

Elements of Product Planning for Goods and Services

Product Management and New-Product Development

Place and Development of Channel Systems

Distribution Customer Service and Logistics

Retailers, Wholesalers, and Their Strategy Planning

Promotionintroduction to Integrated Marketing Communications

Personal Selling and Customer Service

Advertising and Sales Promotion

Publicity: Promotion Using Earned Media, Owned Media, and Social Media

Pricing Objectives and Policies

Ethical Marketing in a Consumer-Oriented World: Appraisal and Challenges

Filters

Exam 18: Price Setting in the Business World

A retailer pays a wholesaler $24.00 for an item and then sells it with a 25 percent markup.The retailer's selling price is

A large supermarket chain purchases a box of cereal from a food wholesaler.If the supermarket chain uses a markup of 20 percent on its selling price of $2.85,what is the price the supermarket chain paid to the food wholesaler?

Even if a firm's average variable cost remains constant per unit,its average cost will increase as output increases.

A firm's break-even point is that point at which

Which of the following does NOT change with an increase in output?

When setting prices,the marketing manager should consider the firm's demand curve,or else the price may not even cover the firm's total cost.

One disadvantage of average-cost pricing is that

Total fixed cost

Demand-backward pricing involves a producer estimating an acceptable final consumer price and working backward to determine what the producer can charge in the channel.

Michael Soles-owner of Soles Shoe Store-recently discovered that shoe stores in his trading area have an average markup of 40 percent.Upon investigation,Michael found that his average markup is $15 on shoes that he sells for $45.This suggests that

If the price per unit is $1.00 and the average variable cost per unit is 60 cents,the fixed cost contribution per unit is $1.40.

An advantage of average-cost pricing is that it considers competitors' costs and prices.

A markup chain can be used to calculate the price structure in a whole channel.

When customers have to pay the bill themselves,they are likely to be more price sensitive.

The form of pricing in which customers pay on a periodic basis for access to a product is referred to as

Subscription pricing is popular because it gives sellers a regular and predictable stream of revenue.

________ are costs that a customer faces by buying a product that is different from what has been purchased or used in the past.

Fly-Right Travel Agency arranges vacation packages to Disney World in Florida.The price includes airfare,a rental car,deluxe accommodations,and tickets to Disney World and other attractions.Fly-Right is using

At zero output,total variable cost is

Marginal analysis

Marketings Value to Consumers, Firms, and Society

Marketing Strategy Planning

Evaluating Opportunities in the Changing Market Environment

Focusing Marketing Strategy With Segmentation and Positioning

Final Consumers and Their Buying Behavior

Business and Organizational Customers and Their Buying Behavior

Improving Decisions With Marketing Information

Elements of Product Planning for Goods and Services

Product Management and New-Product Development

Place and Development of Channel Systems

Distribution Customer Service and Logistics

Retailers, Wholesalers, and Their Strategy Planning

Promotionintroduction to Integrated Marketing Communications

Personal Selling and Customer Service

Advertising and Sales Promotion

Publicity: Promotion Using Earned Media, Owned Media, and Social Media

Pricing Objectives and Policies

Ethical Marketing in a Consumer-Oriented World: Appraisal and Challenges

Filters