Question 1

Which of the following statements regarding price changes is most accurate?

Accepted Answer

A) Product prices should change monthly, whereas services prices should change quarterly. 
B) Changing a product's price too frequently creates antagonism among consumers, yet changing prices too infrequently makes them feel the company is not improving its product or service sufficiently. 
C) Supermarkets should change their prices every week since customers are expecting new prices in the weekly flyers they receive in the mail. 
D) Companies selling products over the Internet can instantly change their prices whenever the need arises. 
E) Internet price changes are regulated by the Internet Fair Practices Act to protect consumers against price gouging. 
A) Product prices should change monthly, whereas services prices should change quarterly. 
B) Changing a product's price too frequently creates antagonism among consumers, yet changing prices too infrequently makes them feel the company is not improving its product or service sufficiently. 
C) Supermarkets should change their prices every week since customers are expecting new prices in the weekly flyers they receive in the mail. 
D) Companies selling products over the Internet can instantly change their prices whenever the need arises. 
E) Internet price changes are regulated by the Internet Fair Practices Act to protect consumers against price gouging.

Question 2

Which of the following would be an example of a constraint in Step 1 of the price-setting process?

Accepted Answer

A) We can rely on our reputation for our other products in the line. 
B) Experts are predicting a surge in global demand. 
C) We need to make allowances for large quantity orders. 
D) We should increase the price during the holiday shopping season. 
E) Remember, we don't know what the selective demand for this new product will be. 
A) We can rely on our reputation for our other products in the line. 
B) Experts are predicting a surge in global demand. 
C) We need to make allowances for large quantity orders. 
D) We should increase the price during the holiday shopping season. 
E) Remember, we don't know what the selective demand for this new product will be.

Question 3

Setting list or quoted prices 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 4

Pricing constraints are

Accepted Answer

A) the controllable elements in a firm's marketing mix that allow it to charge the highest price possible. 
B) formulas used in establishing break-even points, price elasticity of demand, and marginal analysis of revenues and costs. 
C) factors that limit the range of prices a firm may set. 
D) factors that expand the range of prices a firm may set. 
E) virtual boundaries used when setting the initial price on a new product. 
A) the controllable elements in a firm's marketing mix that allow it to charge the highest price possible. 
B) formulas used in establishing break-even points, price elasticity of demand, and marginal analysis of revenues and costs. 
C) factors that limit the range of prices a firm may set. 
D) factors that expand the range of prices a firm may set. 
E) virtual boundaries used when setting the initial price on a new product.

Question 5

During the __________ stage of its product life cycle, a firm has great latitude in setting and maintaining a premium price.

Accepted Answer

A) decline 
B) maturity 
C) growth 
D) accelerated development 
E) introduction 
A) decline 
B) maturity 
C) growth 
D) accelerated development 
E) introduction

Question 6

A company that manages apartments decides to buy 15 new dishwashers at a list price of $550 each as replacements for old dishwashers in a small apartment complex it owns. Because the company is buying more than 10 dishwashers, it is eligible for a $150-per-unit quantity discount. Financing charges total $20 per unit. The company gets $10 per dishwasher for the 15 dishwashers traded in. What is the final price the company will pay for each dishwasher (not the total cost)?

Accepted Answer

A) $390 
B) $400 
C) $410 
D) $430 
E) $730 
A) $390 
B) $400 
C) $410 
D) $430 
E) $730

Question 7

The use of "special fees" and "surcharges" is driven by consumers' zeal for __________ combined with the ease of making price comparisons on the Internet.

Accepted Answer

A) high prices 
B) low prices 
C) quality 
D) value 
E) warranties 
A) high prices 
B) low prices 
C) quality 
D) value 
E) warranties

Question 8

Break-even analysis refers to

Accepted Answer

A) a process that investigates the difference between marginal revenue and marginal cost. 
B) a method of determining just how much a consumer is willing to pay for a product or service. 
C) a technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output. 
D) the process of determining the quantity of product consumers will buy relative to the quantity produced by the firm. 
E) the graph that shows the maximum number of products consumers will buy at a given price. 
A) a process that investigates the difference between marginal revenue and marginal cost. 
B) a method of determining just how much a consumer is willing to pay for a product or service. 
C) a technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output. 
D) the process of determining the quantity of product consumers will buy relative to the quantity produced by the firm. 
E) the graph that shows the maximum number of products consumers will buy at a given price.

Question 9

If competitive market circumstances are such that there is no price competition, no product differentiation, and the purpose of advertising is to increase demand for the product class, then __________ must exist in the industry.

Accepted Answer

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

Question 10

There are a lot of skateboards on the market, but when it was launched the BMW Streetcarver was the only one with stabilizers and wheel design based on BMW's automobiles. This technology gave the BMW Streetcarver better control at high speeds and around sharp turns than any other brand. The skateboard was priced at $495, which left many consumers (especially young males) who might have wanted to buy the Streetcarver unable to afford it. This inability to pay for the high-priced BMW-made skateboard shows the effect of __________ on sales.

Accepted Answer

A) demand factors 
B) macroeconomic environmental factors 
C) barter factors 
D) supply factors 
E) exchange parameters 
A) demand factors 
B) macroeconomic environmental factors 
C) barter factors 
D) supply factors 
E) exchange parameters

Question 11

If a McDonald's menu board advertises Mini Meals under $3, McDonald's is most likely using which type of pricing strategy?

Accepted Answer

A) predatory pricing 
B) value-pricing 
C) loss-leader pricing 
D) odd-even pricing 
E) barter 
A) predatory pricing 
B) value-pricing 
C) loss-leader pricing 
D) odd-even pricing 
E) barter

Question 12

Tara is enrolled for spring semester at college. The tuition is $6,000, but she has a scholarship for $1,000 as well as a work-study grant of $1,500. The health fees and student activity fees are $150 for the semester. What is the final price that Tara will pay for the spring semester?

Accepted Answer

A) $2,500 
B) $2,650 
C) $3,150 
D) $3,650 
E) $6,150 
A) $2,500 
B) $2,650 
C) $3,150 
D) $3,650 
E) $6,150

Question 13

The break-even point (BEP) = [Fixed cost ÷ (Unit price - __________)].

Accepted Answer

A) Total cost 
B) Total expense 
C) Marginal revenue 
D) Unit variable cost 
E) Total number of units produced or quantity 
A) Total cost 
B) Total expense 
C) Marginal revenue 
D) Unit variable cost 
E) Total number of units produced or quantity

Question 14

Price elasticity of demand is determined by a number of factors, such as the necessity of the product or service, the cash outlay of the purchase relative to a person's disposable income, and

Accepted Answer

A) the stage of the product or service in its product life cycle. 
B) the degree of carrying costs for the manufacturer or distributor. 
C) the availability of substitutes. 
D) the financial resources of the organization itself. 
E) the ability of the organization to meet sudden increases in demand. 
A) the stage of the product or service in its product life cycle. 
B) the degree of carrying costs for the manufacturer or distributor. 
C) the availability of substitutes. 
D) the financial resources of the organization itself. 
E) the ability of the organization to meet sudden increases in demand.

Question 15

If you wanted to buy a McDonald's Big Mac, medium fries, and a medium drink separately, it will cost you $8.27. However, if you purchased these three items together as part of the firm's Extra Value Meal package, you would pay only $5.69, saving $2.58. This Extra Value Meal price serves as __________ to you and other consumers, who compare the costs and benefits of substitute items to a bundle containing those items.

Accepted Answer

A) a marginal analysis 
B) a profit equation 
C) a reference value 
D) a break-even analysis 
E) price elasticity of demand 
A) a marginal analysis 
B) a profit equation 
C) a reference value 
D) a break-even analysis 
E) price elasticity of demand

Question 16

A technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output is referred to as

Accepted Answer

A) break-even analysis. 
B) marginal analysis. 
C) sensitivity analysis. 
D) market analysis. 
E) tipping point analysis. 
A) break-even analysis. 
B) marginal analysis. 
C) sensitivity analysis. 
D) market analysis. 
E) tipping point analysis.

Question 17

Which of the following are elements of Step 3 in the price-setting process?

Accepted Answer

A) profit, market share, and survival 
B) estimation of demand, sales revenue, and price elasticity 
C) cost estimation, marginal analysis, and break-even analysis 
D) demand for the product class and brand, newness of the product, and competition 
E) market segmentation targeting, and positioning 
A) profit, market share, and survival 
B) estimation of demand, sales revenue, and price elasticity 
C) cost estimation, marginal analysis, and break-even analysis 
D) demand for the product class and brand, newness of the product, and competition 
E) market segmentation targeting, and positioning

Question 18

Three different objectives relate to a firm's profit, which is often measured in terms of return on investment. One objective, known as __________, is where a company gives up immediate profit in exchange for achieving a higher market share in the hopes of penetrating competitive markets.

Accepted Answer

A) maximizing current profit 
B) target return 
C) break-even strategy 
D) minimizing risk 
E) managing for long-run profits 
A) maximizing current profit 
B) target return 
C) break-even strategy 
D) minimizing risk 
E) managing for long-run profits

Question 19

Washburn Guitars recently purchased Parker Guitar, another guitar manufacturer that designs products for professionals and collectors, and will combine the two production facilities into a new location. Washburn expects the acquisition to reduce its rent and tax expenses by 40 percent, and the new skilled employees will reduce the hours of work needed for each unit by 15 percent. This would cause the slope of the total cost curve to __________ and the break-even quantity to __________.

Accepted Answer

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

Question 20

In order to deliver a product that the average consumer can afford, Vizio

Accepted Answer

A) handles product design and marketing in the United States and relies on contract manufacturers in other countries to build the product. 
B) uses mass customization in other countries and then ships the HDTVs to the United States. 
C) purchased a small company in China to distribute its products under the Vizio name. 
D) purchased a small company in Japan to distribute its products under the Vizio name. 
E) relies solely on recycled materials to build high-quality, no-frills products. 
A) handles product design and marketing in the United States and relies on contract manufacturers in other countries to build the product. 
B) uses mass customization in other countries and then ships the HDTVs to the United States. 
C) purchased a small company in China to distribute its products under the Vizio name. 
D) purchased a small company in Japan to distribute its products under the Vizio name. 
E) relies solely on recycled materials to build high-quality, no-frills products.

Which of the following statements regarding price changes is most accurate?

Which of the following would be an example of a constraint in Step 1 of the price-setting process?

Setting list or quoted prices would occur during __________ of the price-setting process.

Pricing constraints are

During the __________ stage of its product life cycle, a firm has great latitude in setting and maintaining a premium price.

The use of "special fees" and "surcharges" is driven by consumers' zeal for __________ combined with the ease of making price comparisons on the Internet.

Break-even analysis refers to

If competitive market circumstances are such that there is no price competition, no product differentiation, and the purpose of advertising is to increase demand for the product class, then __________ must exist in the industry.

If a McDonald's menu board advertises Mini Meals under $3, McDonald's is most likely using which type of pricing strategy?

Tara is enrolled for spring semester at college. The tuition is $6,000, but she has a scholarship for $1,000 as well as a work-study grant of $1,500. The health fees and student activity fees are $150 for the semester. What is the final price that Tara will pay for the spring semester?

The break-even point (BEP) = [Fixed cost ÷ (Unit price - __________)].

Price elasticity of demand is determined by a number of factors, such as the necessity of the product or service, the cash outlay of the purchase relative to a person's disposable income, and

A technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output is referred to as

Which of the following are elements of Step 3 in the price-setting process?

Three different objectives relate to a firm's profit, which is often measured in terms of return on investment. One objective, known as __________, is where a company gives up immediate profit in exchange for achieving a higher market share in the hopes of penetrating competitive markets.

In order to deliver a product that the average consumer can afford, Vizio

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

Which of the following statements regarding price changes is most accurate?

Which of the following would be an example of a constraint in Step 1 of the price-setting process?

Setting list or quoted prices would occur during __________ of the price-setting process.

Pricing constraints are

During the __________ stage of its product life cycle, a firm has great latitude in setting and maintaining a premium price.

The use of "special fees" and "surcharges" is driven by consumers' zeal for __________ combined with the ease of making price comparisons on the Internet.

Break-even analysis refers to

If competitive market circumstances are such that there is no price competition, no product differentiation, and the purpose of advertising is to increase demand for the product class, then __________ must exist in the industry.

If a McDonald's menu board advertises Mini Meals under $3, McDonald's is most likely using which type of pricing strategy?

Tara is enrolled for spring semester at college. The tuition is $6,000, but she has a scholarship for $1,000 as well as a work-study grant of $1,500. The health fees and student activity fees are $150 for the semester. What is the final price that Tara will pay for the spring semester?

The break-even point (BEP) = [Fixed cost ÷ (Unit price - __________)].

Price elasticity of demand is determined by a number of factors, such as the necessity of the product or service, the cash outlay of the purchase relative to a person's disposable income, and

A technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output is referred to as

Which of the following are elements of Step 3 in the price-setting process?

Three different objectives relate to a firm's profit, which is often measured in terms of return on investment. One objective, known as __________, is where a company gives up immediate profit in exchange for achieving a higher market share in the hopes of penetrating competitive markets.

In order to deliver a product that the average consumer can afford, Vizio

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