Question 1

In an oligopolistic market,a single seller controls the pricing decisions.

Accepted Answer

A) True 
 B)False  False

Question 2

Explain the concept of value pricing.

Accepted Answer

Value pricing is a pricing strategy that emphasizes benefits derived from a product in comparison to the price and quality levels of competing offerings.This strategy typically works best for relatively low-priced goods and services.Value-priced products generally cost less than premium brands,but marketers point out that value does not necessarily mean inexpensive.The challenge for those who compete on value is to convince customers that low-priced brands offer quality comparable to that of a higher-priced product.

Question 3

Pricing objectives that seek sales maximization or achievement of a stated market share are examples of _____ objectives.

Accepted Answer

A)  profitability 
B)  volume 
C)  meeting competition 
D)  prestige 
A)  profitability 
B)  volume 
C)  meeting competition 
D)  prestige B

Question 4

Fair-trade laws assert the manufacturer's authority to protect its asset by requiring retailers to maintain a minimum price.

Accepted Answer

A) True 
 B)False

Question 5

The most popular method of pricing is _____ pricing.

Accepted Answer

A)  cost-plus 
B)  breakeven 
C)  incremental-cost 
D)  full-cost 
A)  cost-plus 
B)  breakeven 
C)  incremental-cost 
D)  full-cost

Question 6

Which of the following is the purpose of adopting a meeting-competition pricing objective?

Accepted Answer

A)  Market share 
B)  Sales maximization 
C)  Profit maximization 
D)  Value pricing 
A)  Market share 
B)  Sales maximization 
C)  Profit maximization 
D)  Value pricing

Question 7

Which of the following terms represents the measure of responsiveness of purchasers and suppliers to a change in price?

Accepted Answer

A)  Selectivity 
B)  Captivity 
C)  Elasticity 
D)  Sensitivity 
A)  Selectivity 
B)  Captivity 
C)  Elasticity 
D)  Sensitivity

Question 8

Which of the following was rendered invalid by the federal Consumer Goods Pricing Act of 1975?

Accepted Answer

A)  The Robinson-Patman Act (1936) 
B)  State unfair-trade laws 
C)  State fair-trade laws 
D)  The Clayton Act (1914) 
A)  The Robinson-Patman Act (1936) 
B)  State unfair-trade laws 
C)  State fair-trade laws 
D)  The Clayton Act (1914)

Question 9

Breakeven analysis is an effective tool for marketers in assessing the sales required for covering costs and achieving specified profit levels.

Accepted Answer

A) True 
 B)False

Question 10

A cost that remains stable at any production level within a certain range is called a(n)_____ cost.

Accepted Answer

A)  variable 
B)  fixed 
C)  average total 
D)  marginal 
A)  variable 
B)  fixed 
C)  average total 
D)  marginal

Question 11

_____ are state laws requiring sellers to maintain minimum prices for comparable merchandise.

Accepted Answer

A) breakeven analysis 
B) tariffs 
C) unfair-trade laws 
D) incremental-cost pricing 
E) profit maximization
F)demand
G)value pricing
H)monopoly
I)elasticity
J)marginal
K)fair-trade laws
L)yield management
M)oligopoly
N)cost-plus pricing
O)full-cost pricing
P)supply
Q)marginal analysis
R)target-return objectives
S)market-share objectives
T)pure competition 
A) breakeven analysis 
B) tariffs 
C) unfair-trade laws 
D) incremental-cost pricing 
E) profit maximization
F)demand
G)value pricing
H)monopoly
I)elasticity
J)marginal
K)fair-trade laws
L)yield management
M)oligopoly
N)cost-plus pricing
O)full-cost pricing
P)supply
Q)marginal analysis
R)target-return objectives
S)market-share objectives
T)pure competition

Question 12

Which of the following is a pricing method that attempts to use only those costs that are directly attributable to a specific output in setting prices?

Accepted Answer

A)  Cost-plus 
B)  Full-cost 
C)  Incremental-cost 
D)  Breakeven 
A)  Cost-plus 
B)  Full-cost 
C)  Incremental-cost 
D)  Breakeven

Question 13

According to the PIMS research,firms with market shares above 40% show an average _____ return on investment.

Accepted Answer

A)  55% 
B)  32% 
C)  14% 
D)  60% 
A)  55% 
B)  32% 
C)  14% 
D)  60%

Question 14

Following table gives information about the price,number of units sold,and total costs incurred for a product.Use the concept of marginal analysis and find the optimal price for the product.

Accepted Answer

The optimal price is the one where margi

Question 15

The pricing strategy that emphasizes benefits derived from a product in comparison to the price and quality levels of competing offerings is called _____.

Accepted Answer

A) breakeven analysis 
B) tariffs 
C) unfair-trade laws 
D) incremental-cost pricing 
E) profit maximization
F)demand
G)value pricing
H)monopoly
I)elasticity
J)marginal
K)fair-trade laws
L)yield management
M)oligopoly
N)cost-plus pricing
O)full-cost pricing
P)supply
Q)marginal analysis
R)target-return objectives
S)market-share objectives
T)pure competition 
A) breakeven analysis 
B) tariffs 
C) unfair-trade laws 
D) incremental-cost pricing 
E) profit maximization
F)demand
G)value pricing
H)monopoly
I)elasticity
J)marginal
K)fair-trade laws
L)yield management
M)oligopoly
N)cost-plus pricing
O)full-cost pricing
P)supply
Q)marginal analysis
R)target-return objectives
S)market-share objectives
T)pure competition

Question 16

When New Orleans' Holy Cross School organizes a $500-per-person concert to raise funds for the operation of the school,their organizational goal is to:

Accepted Answer

A)  maximize their profits. 
B)  implement value pricing. 
C)  suppress the market. 
D)  provide market incentives. 
A)  maximize their profits. 
B)  implement value pricing. 
C)  suppress the market. 
D)  provide market incentives.

Question 17

Most states supplement federal legislation with their own unfair-trade laws,which require sellers to maintain minimum prices for comparable merchandise.

Accepted Answer

A) True 
 B)False

Question 18

Companies which adopt a volume objective continue to expand sales even when their total profits drop below the minimum return acceptable to management.

Accepted Answer

A) True 
 B)False

Question 19

_____ maximization is identified as the point at which the additional revenue gained by increasing the price of a product equals the increase in total costs.

Accepted Answer

A)  Profit 
B)  Volume 
C)  Sales 
D)  Market share 
A)  Profit 
B)  Volume 
C)  Sales 
D)  Market share

Question 20

Traditional economic theory considers both costs and demand in determining an equilibrium price.

Accepted Answer

A) True 
 B)False

Exam 18: Pricing Concepts

In an oligopolistic market,a single seller controls the pricing decisions.

Explain the concept of value pricing.

Pricing objectives that seek sales maximization or achievement of a stated market share are examples of _____ objectives.

Fair-trade laws assert the manufacturer's authority to protect its asset by requiring retailers to maintain a minimum price.

The most popular method of pricing is _____ pricing.

Which of the following is the purpose of adopting a meeting-competition pricing objective?

Which of the following terms represents the measure of responsiveness of purchasers and suppliers to a change in price?

Which of the following was rendered invalid by the federal Consumer Goods Pricing Act of 1975?

Breakeven analysis is an effective tool for marketers in assessing the sales required for covering costs and achieving specified profit levels.

A cost that remains stable at any production level within a certain range is called a(n)_____ cost.

_____ are state laws requiring sellers to maintain minimum prices for comparable merchandise.

Which of the following is a pricing method that attempts to use only those costs that are directly attributable to a specific output in setting prices?

According to the PIMS research,firms with market shares above 40% show an average _____ return on investment.

Following table gives information about the price,number of units sold,and total costs incurred for a product.Use the concept of marginal analysis and find the optimal price for the product.

The pricing strategy that emphasizes benefits derived from a product in comparison to the price and quality levels of competing offerings is called _____.

When New Orleans' Holy Cross School organizes a $500-per-person concert to raise funds for the operation of the school,their organizational goal is to:

Most states supplement federal legislation with their own unfair-trade laws,which require sellers to maintain minimum prices for comparable merchandise.

Companies which adopt a volume objective continue to expand sales even when their total profits drop below the minimum return acceptable to management.

_____ maximization is identified as the point at which the additional revenue gained by increasing the price of a product equals the increase in total costs.

Traditional economic theory considers both costs and demand in determining an equilibrium price.

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