Question 1

Odd prices often suggest __________ to consumers.

Accepted Answer

A)  low quality 
B)  superior quality 
C)  uniqueness 
D)  expired merchandise 
E)  foreign-made goods 
A)  low quality 
B)  superior quality 
C)  uniqueness 
D)  expired merchandise 
E)  foreign-made goods A

Question 2

Price is the _____________ a consumer is willing to make to acquire a specific product or service.

Accepted Answer

A)  amount of money 
B)  overall sacrifice 
C)  fixed cost 
D)  target return 
E)  variable cost 
A)  amount of money 
B)  overall sacrifice 
C)  fixed cost 
D)  target return 
E)  variable cost B

Question 3

How is the price elasticity for Crest toothpaste likely to be different from the price elasticity for all toothpastes (a product category)? Why are they likely to be different?

Accepted Answer

The price elasticity for Crest toothpaste is likely to be greater than the price elasticity for toothpaste as a product category. In general, toothpaste is considered by most consumers as a necessity, so demand should be inelastic. But demand for one brand, Crest, will be more elastic because there are many substitutes. On the other hand, Crest has created brand loyalty that would make the price elasticity of demand for that product less elastic.

Question 4

Suppose that a friend asks you to drive him to the airport this weekend so that he can catch a flight. He pays you for the gas used driving to the airport and for the cost of parking the car at the airport while you help him in with his bags. He then declares that you are now even, since he has fully compensated you for any costs you incurred in helping him get to his flight. From your perspective, what aspects of the price of taking your friend to the airport has he omitted?

Accepted Answer

The full sacrifice of taking t

Question 5

The break-even point is estimated by

Accepted Answer

A)  multiplying revenue per unit times the quantity sold. 
B)  dividing fixed contribution per unit by variable costs. 
C)  multiplying fixed costs by contribution per unit. 
D)  dividing fixed costs by contribution per unit. 
E)  dividing variable costs by fixed costs. 
A)  multiplying revenue per unit times the quantity sold. 
B)  dividing fixed contribution per unit by variable costs. 
C)  multiplying fixed costs by contribution per unit. 
D)  dividing fixed costs by contribution per unit. 
E)  dividing variable costs by fixed costs.

Question 6

Marketers advertising an artificially high regular price are unethically attempting to influence consumers'__________ perceptions.

Accepted Answer

A)  fixed price 
B)  reference price 
C)  seasonal price 
D)  leader price 
E)  cost-based price 
A)  fixed price 
B)  reference price 
C)  seasonal price 
D)  leader price 
E)  cost-based price

Question 7

Price advertisements should never

Accepted Answer

A)  include puffery. 
B)  deceive customers to the point of doing harm. 
C)  include the price. 
D)  use advertising allowances to increase sales promotion. 
E)  use price skimming after using price penetration. 
A)  include puffery. 
B)  deceive customers to the point of doing harm. 
C)  include the price. 
D)  use advertising allowances to increase sales promotion. 
E)  use price skimming after using price penetration.

Question 8

When Burroughs Wellcome introduced the first anti-AIDS drugs, it initially set the price at $10,000 for a year's supply. Burroughs Wellcome was probably pursuing a __________ pricing strategy.

Accepted Answer

A)  skimming 
B)  introductory 
C)  slotting allowance 
D)  market penetration 
E)  cost-based 
A)  skimming 
B)  introductory 
C)  slotting allowance 
D)  market penetration 
E)  cost-based

Question 9

A no-haggle pricing policy is a type of _______________ pricing strategy.

Accepted Answer

A)  maximizing profits 
B)  sales orientation 
C)  target return 
D)  status quo 
E)  customer-oriented 
A)  maximizing profits 
B)  sales orientation 
C)  target return 
D)  status quo 
E)  customer-oriented

Question 10

If a 1 percent decrease in price results in less than a 1 percent increase in the quantity demanded, demand is

Accepted Answer

A)  cross-price elastic. 
B)  price inelastic. 
C)  price elastic. 
D)  status quo elasticity. 
E)  derived demand inelastic. 
A)  cross-price elastic. 
B)  price inelastic. 
C)  price elastic. 
D)  status quo elasticity. 
E)  derived demand inelastic.

Question 11

The contribution per unit is

Accepted Answer

A)  price minus total costs. 
B)  price minus total variable cost. 
C)  price minus variable cost per unit. 
D)  total revenue minus total cost. 
E)  break-even quantity divided by total fixed costs. 
A)  price minus total costs. 
B)  price minus total variable cost. 
C)  price minus variable cost per unit. 
D)  total revenue minus total cost. 
E)  break-even quantity divided by total fixed costs.

Question 12

Why do manufacturers set manufacturer's suggested retail prices (MSRP)? How do they enforce this practice? Is it legal?

Accepted Answer

Manufacturers set MSRP prices to reduce

Question 13

In a __________ pricing tactic, sellers advertise low prices and then aggressively pressure customers to purchase higher-priced versions of the product advertised with the low price.

Accepted Answer

A)  fixed offer 
B)  reference 
C)  seasonal 
D)  bait and switch 
E)  cost-based 
A)  fixed offer 
B)  reference 
C)  seasonal 
D)  bait and switch 
E)  cost-based

Question 14

For which of the following is demand likely to be most sensitive to price increases?

Accepted Answer

A)  prescription drugs 
B)  college tuition for last-semester seniors 
C)  electricity 
D)  hospital care 
E)  a specific brand of soft drink 
A)  prescription drugs 
B)  college tuition for last-semester seniors 
C)  electricity 
D)  hospital care 
E)  a specific brand of soft drink

Question 15

Sales of national brands of orange juice tend to increase when the economy is doing well, while sales of generic orange juice increase when the economy is not doing well. This is an example of how ____________ affects demand for products.

Accepted Answer

A)  the substitution effect 
B)  the price inelasticity coefficient 
C)  the income effect 
D)  the target return effect 
E)  cross-price elasticity 
A)  the substitution effect 
B)  the price inelasticity coefficient 
C)  the income effect 
D)  the target return effect 
E)  cross-price elasticity

Question 16

A study found that, among addicted smokers, a 10 percent increase in the price of cigarettes resulted in a 2 percent decrease in quantity demanded. For these consumers, cigarettes have a(n) ________________ price elasticity demand.

Accepted Answer

A)  elastic 
B)  inelastic 
C)  cross-price 
D)  income effect 
E)  substitution effect 
A)  elastic 
B)  inelastic 
C)  cross-price 
D)  income effect 
E)  substitution effect

Question 17

Ryan is the only retailer in his market selling a new, ergonomically designed pen. What are the objectives of using a market penetration pricing strategy? Why would Ryan consider using a market penetration pricing strategy?

Accepted Answer

The objectives of using a market penetra

Question 18

It is the responsibility of __________ to determine the ethical approach to setting prices so consumers find value and the firm can make a profit.

Accepted Answer

A)  the Better Business Bureau 
B)  federal regulators 
C)  the American Marketing Association 
D)  marketers themselves 
E)  industry standards boards 
A)  the Better Business Bureau 
B)  federal regulators 
C)  the American Marketing Association 
D)  marketers themselves 
E)  industry standards boards

Question 19

What is predatory pricing? What federal acts make it illegal? How are consumers hurt by predatory pricing?

Accepted Answer

Predatory pricing is setting very low pr

Question 20

One problem in relying on price elasticity and demand curves when setting prices is that

Accepted Answer

A)  the way a product or service is marketed can have a profound impact on price elasticity. 
B)  the underlying ideas of the demand curve and elasticity are less relevant in the modern economy. 
C)  only economists can properly analyze demand curves and set prices using this tool. 
D)  competitors can construct the same demand curves, so there is no advantage in using them. 
E)  marketing split from economics over the ideas of demand and elasticity. 
A)  the way a product or service is marketed can have a profound impact on price elasticity. 
B)  the underlying ideas of the demand curve and elasticity are less relevant in the modern economy. 
C)  only economists can properly analyze demand curves and set prices using this tool. 
D)  competitors can construct the same demand curves, so there is no advantage in using them. 
E)  marketing split from economics over the ideas of demand and elasticity.

Odd prices often suggest __________ to consumers.

Price is the _____________ a consumer is willing to make to acquire a specific product or service.

How is the price elasticity for Crest toothpaste likely to be different from the price elasticity for all toothpastes (a product category)? Why are they likely to be different?

The break-even point is estimated by

Marketers advertising an artificially high regular price are unethically attempting to influence consumers'__________ perceptions.

Price advertisements should never

When Burroughs Wellcome introduced the first anti-AIDS drugs, it initially set the price at $10,000 for a year's supply. Burroughs Wellcome was probably pursuing a __________ pricing strategy.

A no-haggle pricing policy is a type of _______________ pricing strategy.

If a 1 percent decrease in price results in less than a 1 percent increase in the quantity demanded, demand is

The contribution per unit is

Why do manufacturers set manufacturer's suggested retail prices (MSRP)? How do they enforce this practice? Is it legal?

In a __________ pricing tactic, sellers advertise low prices and then aggressively pressure customers to purchase higher-priced versions of the product advertised with the low price.

For which of the following is demand likely to be most sensitive to price increases?

Sales of national brands of orange juice tend to increase when the economy is doing well, while sales of generic orange juice increase when the economy is not doing well. This is an example of how ____________ affects demand for products.

A study found that, among addicted smokers, a 10 percent increase in the price of cigarettes resulted in a 2 percent decrease in quantity demanded. For these consumers, cigarettes have a(n) ________________ price elasticity demand.

Ryan is the only retailer in his market selling a new, ergonomically designed pen. What are the objectives of using a market penetration pricing strategy? Why would Ryan consider using a market penetration pricing strategy?

It is the responsibility of __________ to determine the ethical approach to setting prices so consumers find value and the firm can make a profit.

What is predatory pricing? What federal acts make it illegal? How are consumers hurt by predatory pricing?

One problem in relying on price elasticity and demand curves when setting prices is that

Overview of Marketing

Developing Marketing Strategies and a Marketing Plan

Social and Mobile Marketing

Marketing Ethics

Analyzing the Marketing Environment

Consumer Behavior

Business-To-Business Marketing

Global Marketing

Segmentation, Targeting, and Positioning

Marketing Research

Product, Branding, and Packaging Decisions

Developing New Products

Services: the Intangible Product

Supply Chain and Channel Management

Retailing and Multichannel Marketing

Integrated Marketing Communications

Advertising, Public Relations, and Sales Promotions

Personal Selling and Sales Management

Filters

Exam 14: Pricing Concepts for Establishing Value

Odd prices often suggest __________ to consumers.

Price is the _____________ a consumer is willing to make to acquire a specific product or service.

How is the price elasticity for Crest toothpaste likely to be different from the price elasticity for all toothpastes (a product category)? Why are they likely to be different?

The break-even point is estimated by

Marketers advertising an artificially high regular price are unethically attempting to influence consumers'__________ perceptions.

Price advertisements should never

When Burroughs Wellcome introduced the first anti-AIDS drugs, it initially set the price at $10,000 for a year's supply. Burroughs Wellcome was probably pursuing a __________ pricing strategy.

A no-haggle pricing policy is a type of _______________ pricing strategy.

If a 1 percent decrease in price results in less than a 1 percent increase in the quantity demanded, demand is

The contribution per unit is

Why do manufacturers set manufacturer's suggested retail prices (MSRP)? How do they enforce this practice? Is it legal?

In a __________ pricing tactic, sellers advertise low prices and then aggressively pressure customers to purchase higher-priced versions of the product advertised with the low price.

For which of the following is demand likely to be most sensitive to price increases?

Sales of national brands of orange juice tend to increase when the economy is doing well, while sales of generic orange juice increase when the economy is not doing well. This is an example of how ____________ affects demand for products.

A study found that, among addicted smokers, a 10 percent increase in the price of cigarettes resulted in a 2 percent decrease in quantity demanded. For these consumers, cigarettes have a(n) ________________ price elasticity demand.

Ryan is the only retailer in his market selling a new, ergonomically designed pen. What are the objectives of using a market penetration pricing strategy? Why would Ryan consider using a market penetration pricing strategy?

It is the responsibility of __________ to determine the ethical approach to setting prices so consumers find value and the firm can make a profit.

What is predatory pricing? What federal acts make it illegal? How are consumers hurt by predatory pricing?

One problem in relying on price elasticity and demand curves when setting prices is that

Overview of Marketing

Developing Marketing Strategies and a Marketing Plan

Social and Mobile Marketing

Marketing Ethics

Analyzing the Marketing Environment

Consumer Behavior

Business-To-Business Marketing

Global Marketing

Segmentation, Targeting, and Positioning

Marketing Research

Product, Branding, and Packaging Decisions

Developing New Products

Services: the Intangible Product

Supply Chain and Channel Management

Retailing and Multichannel Marketing

Integrated Marketing Communications

Advertising, Public Relations, and Sales Promotions

Personal Selling and Sales Management

Filters