Question 1

There is an old saying, "If you have to ask the price of a yacht, you cannot afford it." Products like yachts are most likely to be associated with

Accepted Answer

A)  cross-shopping. 
B)  competitive parity pricing. 
C)  target return value. 
D)  prestige pricing. 
E)  break-even point pricing. 
A)  cross-shopping. 
B)  competitive parity pricing. 
C)  target return value. 
D)  prestige pricing. 
E)  break-even point pricing.

Question 2

Barry customizes Harley-Davidson motorcycles. No two cycles are alike. He notices that very few customers even ask the price of his motorcycles before they decide to purchase them. Demand for his motorcycles is probably

Accepted Answer

A)  price sensitive. 
B)  price elastic. 
C)  price inelastic. 
D)  income elastic. 
E)  cross-price elastic. 
A)  price sensitive. 
B)  price elastic. 
C)  price inelastic. 
D)  income elastic. 
E)  cross-price elastic.

Question 3

Jacob rents rooms in his hotel for an average of $100 per night. The variable cost per rented room is $20, to cover maid service and utilities. His fixed costs are $100,000 and his profit last year was $20,000. For Jacob, the contribution per unit is

Accepted Answer

A)  $100. 
B)  $80. 
C)  $800. 
D)  $1,000. 
E)  It cannot be determined from the information provided. 
A)  $100. 
B)  $80. 
C)  $800. 
D)  $1,000. 
E)  It cannot be determined from the information provided.

Question 4

Diane owns a bakery where she sells cupcakes. Two blocks down there is another bakery, CC's Bakery, that sells cupcakes for $1 less than Diane. Diane decides to lower her price and match CC's Bakery prices. What type of pricing strategy is Diane implementing?

Accepted Answer

A)  internal pricing 
B)  profit-oriented pricing 
C)  competitor-oriented pricing 
D)  customer-oriented pricing 
E)  sales-oriented pricing 
A)  internal pricing 
B)  profit-oriented pricing 
C)  competitor-oriented pricing 
D)  customer-oriented pricing 
E)  sales-oriented pricing

Question 5

Because there are many firms with similar products in purely competitive markets,

Accepted Answer

A)  price is determined by the laws of supply and demand. 
B)  consumers develop personal preferences. 
C)  firms find it easy to build strong, distinct brands. 
D)  advertising is heavily used. 
E)  the many competitors will focus on variable cost pricing. 
A)  price is determined by the laws of supply and demand. 
B)  consumers develop personal preferences. 
C)  firms find it easy to build strong, distinct brands. 
D)  advertising is heavily used. 
E)  the many competitors will focus on variable cost pricing.

Question 6

Which of the following markets is MOST likely to be characterized by oligopolistic competition in the United States?

Accepted Answer

A)  soybeans 
B)  pens and pencils 
C)  soft drinks 
D)  men's clothing 
E)  electrical service to the home 
A)  soybeans 
B)  pens and pencils 
C)  soft drinks 
D)  men's clothing 
E)  electrical service to the home

Question 7

A demand curve is built assuming that

Accepted Answer

A)  income is derived from demand. 
B)  price remains the same, and fixed costs change. 
C)  everything but price and demand remains the same. 
D)  a change in quantity demanded causes a change in price. 
E)  the firm does not advertise. 
A)  income is derived from demand. 
B)  price remains the same, and fixed costs change. 
C)  everything but price and demand remains the same. 
D)  a change in quantity demanded causes a change in price. 
E)  the firm does not advertise.

Question 8

Which of the following is the most logical example of complementary products?

Accepted Answer

A)  Hot dogs and hamburgers 
B)  VCRs and DVD players 
C)  Hot dogs and hot dog buns 
D)  Honda cars and Toyota cars 
E)  A university and a corporation 
A)  Hot dogs and hamburgers 
B)  VCRs and DVD players 
C)  Hot dogs and hot dog buns 
D)  Honda cars and Toyota cars 
E)  A university and a corporation

Question 9

Labor, materials, and energy are typically __________ costs.

Accepted Answer

A)  fixed 
B)  incidental 
C)  prestige 
D)  inelastic 
E)  variable 
A)  fixed 
B)  incidental 
C)  prestige 
D)  inelastic 
E)  variable

Question 10

According to a typical demand curve, the higher the price,

Accepted Answer

A)  the greater the income effect. 
B)  the lower the quantity consumers will buy. 
C)  the lower the output of producers. 
D)  the greater the production costs. 
E)  the lower the cross-price elasticity. 
A)  the greater the income effect. 
B)  the lower the quantity consumers will buy. 
C)  the lower the output of producers. 
D)  the greater the production costs. 
E)  the lower the cross-price elasticity.

Question 11

Bill is a yacht broker in the southeastern United States. For years he has had difficulty selling large yachts locally because there were few places to dock these boats. Yachts and spaces to dock them are an example of

Accepted Answer

A)  substitute products. 
B)  purely competitive products. 
C)  status quo pricing products. 
D)  complementary products. 
E)  competitive parity products. 
A)  substitute products. 
B)  purely competitive products. 
C)  status quo pricing products. 
D)  complementary products. 
E)  competitive parity products.

Question 12

Price is the only part of the marketing mix that does not generate costs.

Accepted Answer

A) True 
 B)False

Question 13

Price is the cash expenditure plus taxes that consumers have to pay for a good or service.

Accepted Answer

A) True 
 B)False

Question 14

Developing pricing strategies for __________ is one of the most challenging tasks a manager can undertake.

Accepted Answer

A)  cost-based pricing 
B)  seasonal rebate items 
C)  new products 
D)  zone pricing products 
E)  quantity discounts 
A)  cost-based pricing 
B)  seasonal rebate items 
C)  new products 
D)  zone pricing products 
E)  quantity discounts

Question 15

How can a company find its way out of a market characterized by pure competition?

Accepted Answer

A)  Consistently offer the lowest price until other competitors leave the market. 
B)  Increase prices and attract different, quality-oriented customers. 
C)  Decrease the amount of available product until the market reacts. 
D)  Increase the amount of available product to flood the market. 
E)  Differentiate the product in some way, even by packaging, so customers will see it as distinct. 
A)  Consistently offer the lowest price until other competitors leave the market. 
B)  Increase prices and attract different, quality-oriented customers. 
C)  Decrease the amount of available product until the market reacts. 
D)  Increase the amount of available product to flood the market. 
E)  Differentiate the product in some way, even by packaging, so customers will see it as distinct.

Question 16

Why would a price skimming strategy probably not work for a me-too product, something very similar to a new-to-the-market product?

Accepted Answer

For price skimming to work, th

Question 17

The key to successful pricing is to match the product with the consumer's perception of value.

Accepted Answer

A) True 
 B)False

Question 18

Why would the manufacturer of custom-made yachts not use a market penetration strategy?

Accepted Answer

First, a manufacturer of custom-made yac

Question 19

Developing a good pricing strategy is essential to the financial well-being of a firm. Even though a firm has an excellent strategy, what are continuing threats to the strategy?

Accepted Answer

Economic conditions, changes i

Question 20

If the price for a product increases, the demand for the complementary product will

Accepted Answer

A)  decrease. 
B)  increase. 
C)  stay the same. 
D)  become more elastic. 
E)  become more inelastic. 
A)  decrease. 
B)  increase. 
C)  stay the same. 
D)  become more elastic. 
E)  become more inelastic.

There is an old saying, "If you have to ask the price of a yacht, you cannot afford it." Products like yachts are most likely to be associated with

Barry customizes Harley-Davidson motorcycles. No two cycles are alike. He notices that very few customers even ask the price of his motorcycles before they decide to purchase them. Demand for his motorcycles is probably

Jacob rents rooms in his hotel for an average of $100 per night. The variable cost per rented room is $20, to cover maid service and utilities. His fixed costs are $100,000 and his profit last year was $20,000. For Jacob, the contribution per unit is

Diane owns a bakery where she sells cupcakes. Two blocks down there is another bakery, CC's Bakery, that sells cupcakes for $1 less than Diane. Diane decides to lower her price and match CC's Bakery prices. What type of pricing strategy is Diane implementing?

Because there are many firms with similar products in purely competitive markets,

Which of the following markets is MOST likely to be characterized by oligopolistic competition in the United States?

A demand curve is built assuming that

Which of the following is the most logical example of complementary products?

Labor, materials, and energy are typically __________ costs.

According to a typical demand curve, the higher the price,

Bill is a yacht broker in the southeastern United States. For years he has had difficulty selling large yachts locally because there were few places to dock these boats. Yachts and spaces to dock them are an example of

Price is the only part of the marketing mix that does not generate costs.

Price is the cash expenditure plus taxes that consumers have to pay for a good or service.

Developing pricing strategies for __________ is one of the most challenging tasks a manager can undertake.

How can a company find its way out of a market characterized by pure competition?

Why would a price skimming strategy probably not work for a me-too product, something very similar to a new-to-the-market product?

The key to successful pricing is to match the product with the consumer's perception of value.

Why would the manufacturer of custom-made yachts not use a market penetration strategy?

Developing a good pricing strategy is essential to the financial well-being of a firm. Even though a firm has an excellent strategy, what are continuing threats to the strategy?

If the price for a product increases, the demand for the complementary product will

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

There is an old saying, "If you have to ask the price of a yacht, you cannot afford it." Products like yachts are most likely to be associated with

Barry customizes Harley-Davidson motorcycles. No two cycles are alike. He notices that very few customers even ask the price of his motorcycles before they decide to purchase them. Demand for his motorcycles is probably

Jacob rents rooms in his hotel for an average of $100 per night. The variable cost per rented room is $20, to cover maid service and utilities. His fixed costs are $100,000 and his profit last year was $20,000. For Jacob, the contribution per unit is

Diane owns a bakery where she sells cupcakes. Two blocks down there is another bakery, CC's Bakery, that sells cupcakes for $1 less than Diane. Diane decides to lower her price and match CC's Bakery prices. What type of pricing strategy is Diane implementing?

Because there are many firms with similar products in purely competitive markets,

Which of the following markets is MOST likely to be characterized by oligopolistic competition in the United States?

A demand curve is built assuming that

Which of the following is the most logical example of complementary products?

Labor, materials, and energy are typically __________ costs.

According to a typical demand curve, the higher the price,

Bill is a yacht broker in the southeastern United States. For years he has had difficulty selling large yachts locally because there were few places to dock these boats. Yachts and spaces to dock them are an example of

Price is the only part of the marketing mix that does not generate costs.

Price is the cash expenditure plus taxes that consumers have to pay for a good or service.

Developing pricing strategies for __________ is one of the most challenging tasks a manager can undertake.

How can a company find its way out of a market characterized by pure competition?

Why would a price skimming strategy probably not work for a me-too product, something very similar to a new-to-the-market product?

The key to successful pricing is to match the product with the consumer's perception of value.

Why would the manufacturer of custom-made yachts not use a market penetration strategy?

Developing a good pricing strategy is essential to the financial well-being of a firm. Even though a firm has an excellent strategy, what are continuing threats to the strategy?

If the price for a product increases, the demand for the complementary product will

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