Question 1

A primary reason for Washburn Guitars' success is

Accepted Answer

A) underselling competitors by mass-producing fine-quality guitars. 
B) developing product lines at different price points for different market segments. 
C) offering significant price breaks to well-known performers in exchange for product endorsements. 
D) selling traditional American "rock 'n roll" guitars in global markets. 
E) setting up free music programs and donating low-price-point guitars to students in schools that have lost their music programs due to budget constraints. 
A) underselling competitors by mass-producing fine-quality guitars. 
B) developing product lines at different price points for different market segments. 
C) offering significant price breaks to well-known performers in exchange for product endorsements. 
D) selling traditional American "rock 'n roll" guitars in global markets. 
E) setting up free music programs and donating low-price-point guitars to students in schools that have lost their music programs due to budget constraints.

Question 2

According to the price equation, final price equals list price minus __________ plus extra fees.

Accepted Answer

A) profits 
B) commissions 
C) trade-ins 
D) taxes 
E) incentives and allowances 
A) profits 
B) commissions 
C) trade-ins 
D) taxes 
E) incentives and allowances

Question 3

The vertical axis of a demand curve graph represents

Accepted Answer

A) market growth rate. 
B) relative market share. 
C) price per unit. 
D) potential profit in dollars. 
E) quantity demanded. 
A) market growth rate. 
B) relative market share. 
C) price per unit. 
D) potential profit in dollars. 
E) quantity demanded.

Question 4

Market share is the ratio of the __________ to those of the industry, including the firm itself.

Accepted Answer

A) target return on sales 
B) marginal profit of the firm 
C) firm's sales revenues or unit sales 
D) marketing expenses of the firm 
E) profits of the firm 
A) target return on sales 
B) marginal profit of the firm 
C) firm's sales revenues or unit sales 
D) marketing expenses of the firm 
E) profits of the firm

Question 5

When Pizza Hut announced it was going to add 25 percent more toppings to its Meat Lover's line of pizzas without increasing prices, what consumer motivation was it appealing to?

Accepted Answer

A) cost 
B) appearance 
C) value 
D) price 
E) quality 
A) cost 
B) appearance 
C) value 
D) price 
E) quality

Question 6

Tim Marlow, the owner of The Clock Works, wanted to know how many clocks he must sell in order to cover his fixed cost at a given price. Marloq knew that he had total fixed costs of $20,000 for equipment, taxes, and a bank loan. He also had a unit variable cost of $20 per clock for labor and materials. If the price Marlow charges for each of his clocks is $40, what is his break-even point quantity?

Accepted Answer

A) 100 clocks 
B) 334 clocks 
C) 500 clocks 
D) 1,000 clocks 
E) 10,000 clocks 
A) 100 clocks 
B) 334 clocks 
C) 500 clocks 
D) 1,000 clocks 
E) 10,000 clocks

Question 7

Describe a profit objective used by many Japanese manufacturing firms.

Accepted Answer

Managing for long-run profits is a prici

Question 8

Barter refers to

Accepted Answer

A) a reciprocity agreement stipulating that if company "A" purchases services from company "B," then company "B" must purchase similar services from company "A." 
B) a tying agreement stipulating that if company "A" purchases a product from company "B," it must also purchase one of its services. 
C) the practice of exchanging products and services for other products and services rather than for money. 
D) the practice of exchanging services for products of equal or greater value. 
E) the practice of exchanging products and services for money. 
A) a reciprocity agreement stipulating that if company "A" purchases services from company "B," then company "B" must purchase similar services from company "A." 
B) a tying agreement stipulating that if company "A" purchases a product from company "B," it must also purchase one of its services. 
C) the practice of exchanging products and services for other products and services rather than for money. 
D) the practice of exchanging services for products of equal or greater value. 
E) the practice of exchanging products and services for money.

Question 9

The marketplace sets the price for wheat, so farmers who are trying to sell their wheat crops don't have to create a pricing strategy. The wheat is sold in __________ type of competitive market.

Accepted Answer

A) an oligopoly 
B) a pure monopoly 
C) a pure competition 
D) a monopolistic competition 
E) a monopolistic oligopoly 
A) an oligopoly 
B) a pure monopoly 
C) a pure competition 
D) a monopolistic competition 
E) a monopolistic oligopoly

Question 10

Barter is the practice of exchanging products and services for other products and services rather than for

Accepted Answer

A) value. 
B) ideas. 
C) promises. 
D) tariffs. 
E) money. 
A) value. 
B) ideas. 
C) promises. 
D) tariffs. 
E) money.

Question 11

An online movie streaming service charges $14.99 per month for its basic package. However, when a competitor introduced the same service at $13.99, the firm dropped its price to $13.99. The firm most likely made this price reduction in an attempt to

Accepted Answer

A) decrease revenue but increase profit. 
B) increase profit by decreasing revenue. 
C) maintain market share. 
D) decrease market share. 
E) increase efficiency. 
A) decrease revenue but increase profit. 
B) increase profit by decreasing revenue. 
C) maintain market share. 
D) decrease market share. 
E) increase efficiency.

Question 12

Jane Westerlund owns a picture-framing store, The Caplow Co. The average price she receives for a framed picture is $120. This price must cover her costs for a typical framed picture, which consists of $5 for glass, $2 for matting, $13 for the frame, and $30 for the labor involved. She must also cover monthly expenses of $1,000 for rent and insurance, $200 for heat and electricity, $500 for advertising, and $3,500 for her salary. Assuming there is no change in price or the quantity demanded, if Westerlund wants to increase her advertising expenses to a total of $1,000 (a $500 increase), this would cause total costs to __________ and the break-even quantity to __________.

Accepted Answer

A) decrease; stay the same 
B) increase; increase 
C) decrease; increase 
D) stay the same; increase 
E) stay the same; decrease 
A) decrease; stay the same 
B) increase; increase 
C) decrease; increase 
D) stay the same; increase 
E) stay the same; decrease

Question 13

The total money received from the sale of a product is referred to as

Accepted Answer

A) profit. 
B) total revenue. 
C) average revenue. 
D) marginal revenue. 
E) derived demand. 
A) profit. 
B) total revenue. 
C) average revenue. 
D) marginal revenue. 
E) derived demand.

Question 14

Suppose you are the owner of a picture frame store and you wish to calculate how many frames you must sell to cover your fixed and variable costs at a given price. Let's assume that the demand for your frames is strong, so the average price customers are willing to pay for each picture frame is $120. Also, suppose your fixed costs (FC) total $32,000 (real estate taxes, interest on a bank loan, etc.) and unit variable cost (UVC) for a picture frame is $50 (labor, glass, frame, and matting). If your picture frame store sold 2,000 picture frames, what would your profit (or loss) be?

Accepted Answer

A) a loss of $32,000 
B) $0-only able to break even 
C) $100,000 profit 
D) $108,000 profit 
E) $132,000 profit 
A) a loss of $32,000 
B) $0-only able to break even 
C) $100,000 profit 
D) $108,000 profit 
E) $132,000 profit

Question 15

A reference value

Accepted Answer

A) is relative to the amount of time and energy a consumer puts into the purchase process. 
B) is based upon the value assigned to similar items used by the consumer's peers. 
C) results from performing a careful break-even analysis. 
D) involves comparing the costs and benefits of substitute items. 
E) is based upon the differential between customers' "needs" and "wants." 
A) is relative to the amount of time and energy a consumer puts into the purchase process. 
B) is based upon the value assigned to similar items used by the consumer's peers. 
C) results from performing a careful break-even analysis. 
D) involves comparing the costs and benefits of substitute items. 
E) is based upon the differential between customers' "needs" and "wants."

Question 16

Acme Shoe Co. sells heel replacement kits for men's shoes. It has fixed costs of $9 million and unit variable costs of $5 per pair. Acme is considering a switch from manual labor to an automated process. New equipment would cost an additional $4 million per year while lowering variable costs by $3 per shoe repair kit. How many kits would Acme have to sell at $17 per pair to make $2 million in profit in the next year with the automated process?

Accepted Answer

A) 117,648 kits 
B) 428,572 kits 
C) 705,883 kits 
D) 916,667 kits 
E) 1,000,000 kits 
A) 117,648 kits 
B) 428,572 kits 
C) 705,883 kits 
D) 916,667 kits 
E) 1,000,000 kits

Question 17

Selecting an approximate price level would occur during __________ of the price-setting process.

Accepted Answer

A) Step 1 
B) Step 2 
C) Step 3 
D) Step 4 
E) Step 5 
A) Step 1 
B) Step 2 
C) Step 3 
D) Step 4 
E) Step 5

Question 18

All of the following are examples of pricing constraints except

Accepted Answer

A) familiarity of the product. 
B) competitors' prices. 
C) newness of the product. 
D) social responsibility. 
E) demand for the product class, product, or brand. 
A) familiarity of the product. 
B) competitors' prices. 
C) newness of the product. 
D) social responsibility. 
E) demand for the product class, product, or brand.

Question 19

The competitive market situation in which one seller sets the price for a unique product is referred to as

Accepted Answer

A) pure monopoly. 
B) oligopoly. 
C) monopolistic competition. 
D) pure competition. 
E) monopolistic oligopoly. 
A) pure monopoly. 
B) oligopoly. 
C) monopolistic competition. 
D) pure competition. 
E) monopolistic oligopoly.

Question 20

All of the following are synonyms for price except

Accepted Answer

A) a premium. 
B) barter. 
C) tuition. 
D) a commission. 
E) profit. 
A) a premium. 
B) barter. 
C) tuition. 
D) a commission. 
E) profit.

A primary reason for Washburn Guitars' success is

According to the price equation, final price equals list price minus __________ plus extra fees.

The vertical axis of a demand curve graph represents

Market share is the ratio of the __________ to those of the industry, including the firm itself.

When Pizza Hut announced it was going to add 25 percent more toppings to its Meat Lover's line of pizzas without increasing prices, what consumer motivation was it appealing to?

Describe a profit objective used by many Japanese manufacturing firms.

Barter refers to

The marketplace sets the price for wheat, so farmers who are trying to sell their wheat crops don't have to create a pricing strategy. The wheat is sold in __________ type of competitive market.

Barter is the practice of exchanging products and services for other products and services rather than for

An online movie streaming service charges $14.99 per month for its basic package. However, when a competitor introduced the same service at $13.99, the firm dropped its price to $13.99. The firm most likely made this price reduction in an attempt to

The total money received from the sale of a product is referred to as

A reference value

Selecting an approximate price level would occur during __________ of the price-setting process.

All of the following are examples of pricing constraints except

The competitive market situation in which one seller sets the price for a unique product is referred to as

All of the following are synonyms for price except

Creating Customer Relationships and Value Through Marketing

Developing Successful Organizational and Marketing Strategies

Scanning the Marketing Environment

Ethical and Social Responsibility for Sustainable Marketing

Understanding Consumer Behavior

Understanding Organizations As Customers

Understanding and Reaching Global Consumers and Markets

Marketing Research: From Customer Insights to Actions

Market Segmentation Targeting and Positioning

Developing New Products and Services

Managing Successful Products Services and Brands

Services Marketing

Arriving at the Final Price

Managing Marketing Channels and Supply Chains

Retailing and Wholesaling

Integrated Marketing Communications and Direct Marketing

Advertising Sales Promotion and Public Relations

Using Social Media and Mobile Marketing to Connect With Consumers

Personal Selling and Sales Management

Implementing Interactive and Multichannel Marketing

Pulling It All Together: the Strategic Marketing Process

Financial Aspects of Marketing

Building an Effective Marketing Plan

Filters

Exam 13: Building the Price Foundation

A primary reason for Washburn Guitars' success is

According to the price equation, final price equals list price minus __________ plus extra fees.

The vertical axis of a demand curve graph represents

Market share is the ratio of the __________ to those of the industry, including the firm itself.

When Pizza Hut announced it was going to add 25 percent more toppings to its Meat Lover's line of pizzas without increasing prices, what consumer motivation was it appealing to?

Describe a profit objective used by many Japanese manufacturing firms.

Barter refers to

The marketplace sets the price for wheat, so farmers who are trying to sell their wheat crops don't have to create a pricing strategy. The wheat is sold in __________ type of competitive market.

Barter is the practice of exchanging products and services for other products and services rather than for

An online movie streaming service charges $14.99 per month for its basic package. However, when a competitor introduced the same service at $13.99, the firm dropped its price to $13.99. The firm most likely made this price reduction in an attempt to

The total money received from the sale of a product is referred to as

A reference value

Selecting an approximate price level would occur during __________ of the price-setting process.

All of the following are examples of pricing constraints except

The competitive market situation in which one seller sets the price for a unique product is referred to as

All of the following are synonyms for price except

Creating Customer Relationships and Value Through Marketing

Developing Successful Organizational and Marketing Strategies

Scanning the Marketing Environment

Ethical and Social Responsibility for Sustainable Marketing

Understanding Consumer Behavior

Understanding Organizations As Customers

Understanding and Reaching Global Consumers and Markets

Marketing Research: From Customer Insights to Actions

Market Segmentation Targeting and Positioning

Developing New Products and Services

Managing Successful Products Services and Brands

Services Marketing

Arriving at the Final Price

Managing Marketing Channels and Supply Chains

Retailing and Wholesaling

Integrated Marketing Communications and Direct Marketing

Advertising Sales Promotion and Public Relations

Using Social Media and Mobile Marketing to Connect With Consumers

Personal Selling and Sales Management

Implementing Interactive and Multichannel Marketing

Pulling It All Together: the Strategic Marketing Process

Financial Aspects of Marketing

Building an Effective Marketing Plan

Filters