Question 1

Profit is equal to the price charged to customers multiplied by the number of units sold.

Accepted Answer

A) True 
 B)False

Question 2

If the formula for elasticity results in a measure of elasticity (E)equal to 1,the increase in sales exactly offsets the decrease in price so that total revenue remains the same.

Accepted Answer

A) True 
 B)False

Question 3

What is the impact of the Internet on pricing strategies?

Accepted Answer

The Internet is enabling buyers to quick

Question 4

When Apple Inc.originally introduced its iPhone it was priced at what many believed to be about as high as the market would allow.Within weeks Apple lowered the price of the iPhone.It appears that Apple Inc.entered the market with a _____ approach to pricing the iPhone.

Accepted Answer

A)  market share pricing 
B)  profit maximization 
C)  demand-oriented 
D)  sales maximization 
E)  status quo pricing 
A)  market share pricing 
B)  profit maximization 
C)  demand-oriented 
D)  sales maximization 
E)  status quo pricing

Question 5

Which of the following statements about the Internet is true?

Accepted Answer

A)  The Internet has shifted all shopping power to consumers. 
B)  Consumer reviews tend to be equal in quality. 
C)  Business-to-business auctions on the Internet are likely to be more important than consumer auctions in the future. 
D)  Fraud is not a problem on the Internet. 
E)  Extranets are programs that search the Internet for the best price for a particular product. 
A)  The Internet has shifted all shopping power to consumers. 
B)  Consumer reviews tend to be equal in quality. 
C)  Business-to-business auctions on the Internet are likely to be more important than consumer auctions in the future. 
D)  Fraud is not a problem on the Internet. 
E)  Extranets are programs that search the Internet for the best price for a particular product.

Question 6

When the Apple iPhone 3G was introduced the Apple iTunes web site also began selling small program "apps" written by third parties that could be run on the iPhone.One interesting app was the "I Am Rich" application.For a price of $1,000 you could buy this app that did nothing but display a red gem on the iPhone's screen.The description of the app stated that this red icon would remind you (and others you show it to)"that you were rich enough to afford this." Six of the applications were sold before Apple Inc.removed the app from iTunes.At the $1,000 price the author of the app was using _____ pricing as part of his marketing approach.

Accepted Answer

A)  snob appeal 
B)  prestige 
C)  exclusive 
D)  selective 
E)  unique 
A)  snob appeal 
B)  prestige 
C)  exclusive 
D)  selective 
E)  unique

Question 7

Fixed cost contribution equals:

Accepted Answer

A)  price times the average fixed cost 
B)  price plus the average variable cost 
C)  average variable cost plus average fixed cost 
D)  break-even quantity times price 
E)  price minus the average variable cost 
A)  price times the average fixed cost 
B)  price plus the average variable cost 
C)  average variable cost plus average fixed cost 
D)  break-even quantity times price 
E)  price minus the average variable cost

Question 8

_____ occurs when an increase in sales exactly offsets a decrease in price so that total revenue remains exactly the same.

Accepted Answer

A)  Inelastic demand 
B)  Functional elasticity of demand 
C)  Unitary elasticity 
D)  Highly elastic demand 
E)  Fixed elasticity 
A)  Inelastic demand 
B)  Functional elasticity of demand 
C)  Unitary elasticity 
D)  Highly elastic demand 
E)  Fixed elasticity

Question 9

The price of the good or service is a key decision for a marketer because it most significantly and directly affects the product's:

Accepted Answer

A)  distribution 
B)  costs 
C)  demand 
D)  promotion 
E)  quality 
A)  distribution 
B)  costs 
C)  demand 
D)  promotion 
E)  quality

Question 10

The _____ is the quantity of a product that will be sold in the market at various prices for a specified time period,and _____ is the quantity of a product that will be offered to the market by suppliers at various prices for a specified period.

Accepted Answer

A)  demand; equity 
B)  demand; supply 
C)  supply; demand 
D)  inventory; demand 
E)  inventory; supply 
A)  demand; equity 
B)  demand; supply 
C)  supply; demand 
D)  inventory; demand 
E)  inventory; supply

Question 11

At a price of $1,192,057,the Bugatti Veyron may be the most expensive street legal car currently on the market today.Obviously,Bugatti is NOT using a _____ pricing objective in setting the price for this car.

Accepted Answer

A)  inelastic or supply-oriented 
B)  market share or sales maximization 
C)  profit maximization or target return on investment 
D)  status quo or satisfactory profits 
E)  demand-oriented or supply-oriented 
A)  inelastic or supply-oriented 
B)  market share or sales maximization 
C)  profit maximization or target return on investment 
D)  status quo or satisfactory profits 
E)  demand-oriented or supply-oriented

Question 12

What is the difference between fixed and variable costs? Give examples of each type of cost.

Accepted Answer

FIXED COSTS are those expenses of the fi

Question 13

As long as the revenue of the last unit produced and sold is greater than the cost of the last unit produced and sold,a firm should:

Accepted Answer

A)  continue manufacturing 
B)  not use formula pricing 
C)  continue using price equilibrium 
D)  consider using sales maximization pricing 
E)  reach its break-even point very shortly 
A)  continue manufacturing 
B)  not use formula pricing 
C)  continue using price equilibrium 
D)  consider using sales maximization pricing 
E)  reach its break-even point very shortly

Question 14

Yield management systems are used to:

Accepted Answer

A)  determine the availability of product substitutes in complex industries that are experiencing rapid change 
B)  profitably fill unused capacity 
C)  predict necessary service levels to achieve revenue goals 
D)  determine whether it is financially more feasible to buy a new product or repair a broken one 
E)  create elastic demand for low-involvement products 
A)  determine the availability of product substitutes in complex industries that are experiencing rapid change 
B)  profitably fill unused capacity 
C)  predict necessary service levels to achieve revenue goals 
D)  determine whether it is financially more feasible to buy a new product or repair a broken one 
E)  create elastic demand for low-involvement products

Question 15

Cowboy Malone's Electric City pays a wholesaler $700 for a television and sells it to a customer for $1,500.The markup on the television is:

Accepted Answer

A)  $240 
B)  $160 
C)  $700 
D)  $800 
E)  $1,500 
A)  $240 
B)  $160 
C)  $700 
D)  $800 
E)  $1,500

Question 16

_____ is the quantity of a product that will be offered to the market at various prices for a specified period.

Accepted Answer

A)  Distribution 
B)  Supply 
C)  Price 
D)  Equilibrium 
E)  Elasticity 
A)  Distribution 
B)  Supply 
C)  Price 
D)  Equilibrium 
E)  Elasticity

Question 17

Furr Friends sells kits for making personalized grave markers for pets.The company sells each kit for $25.The average variable cost for each kit is $10,and the total annual fixed costs for plant operation are $45,000.What is the break-even point in units?

Accepted Answer

A)  1,800 
B)  2,500 
C)  3,000 
D)  4,500 
E)  5,000 
A)  1,800 
B)  2,500 
C)  3,000 
D)  4,500 
E)  5,000

Question 18

Which of the following statements describes a limitation associated with break-even analysis?

Accepted Answer

A)  It is sometimes difficult to ascertain whether a cost is fixed or variable. 
B)  It requires the calculation of marginal revenue. 
C)  It strictly considers demand. 
D)  It assumes variable cost per item, which is difficult to calculate. 
E)  It can only be expressed as a break-even point in dollar amounts. 
A)  It is sometimes difficult to ascertain whether a cost is fixed or variable. 
B)  It requires the calculation of marginal revenue. 
C)  It strictly considers demand. 
D)  It assumes variable cost per item, which is difficult to calculate. 
E)  It can only be expressed as a break-even point in dollar amounts.

Question 19

Tesla Motors
"Going green" doesn't have to be boring. The Tesla Roadster Sport is an electric car that goes from 0 to 60 in four seconds and drives more like a race car than an environmentally-friendly ride. But that level of performance will set you back $128,500. As of 2009, Silicon Valley-based Tesla Motors, Inc. was the only company offering highway-compatible electric cars. Most Roadster Sport buyers are car enthusiasts and are buying them for the "fun toy" aspect of having an electric car rather than for environmental reasons.
-Refer to Tesla Motors. The price of the Roadster was set so that total revenue was as large as possible relative to total costs.This represents a _____ approach.

Accepted Answer

A)  profit maximization 
B)  market share pricing 
C)  demand-oriented pricing 
D)  sales maximization 
E)  status quo pricing 
A)  profit maximization 
B)  market share pricing 
C)  demand-oriented pricing 
D)  sales maximization 
E)  status quo pricing

Question 20

When the NES Group lowered the price of its professional-grade meat slicers from $2,300 to $1,600,demand doubled from 4 units sold per month to 8 units per month.However,total revenue dropped.This is an example of:

Accepted Answer

A)  substitute goods 
B)  unitary elasticity 
C)  elastic demand 
D)  consumer shortage 
E)  inelastic demand 
A)  substitute goods 
B)  unitary elasticity 
C)  elastic demand 
D)  consumer shortage 
E)  inelastic demand

Profit is equal to the price charged to customers multiplied by the number of units sold.

If the formula for elasticity results in a measure of elasticity (E)equal to 1,the increase in sales exactly offsets the decrease in price so that total revenue remains the same.

What is the impact of the Internet on pricing strategies?

When Apple Inc.originally introduced its iPhone it was priced at what many believed to be about as high as the market would allow.Within weeks Apple lowered the price of the iPhone.It appears that Apple Inc.entered the market with a _____ approach to pricing the iPhone.

Which of the following statements about the Internet is true?

Fixed cost contribution equals:

_____ occurs when an increase in sales exactly offsets a decrease in price so that total revenue remains exactly the same.

The price of the good or service is a key decision for a marketer because it most significantly and directly affects the product's:

The _ is the quantity of a product that will be sold in the market at various prices for a specified time period,and _ is the quantity of a product that will be offered to the market by suppliers at various prices for a specified period.

At a price of $1,192,057,the Bugatti Veyron may be the most expensive street legal car currently on the market today.Obviously,Bugatti is NOT using a _____ pricing objective in setting the price for this car.

What is the difference between fixed and variable costs? Give examples of each type of cost.

As long as the revenue of the last unit produced and sold is greater than the cost of the last unit produced and sold,a firm should:

Yield management systems are used to:

Cowboy Malone's Electric City pays a wholesaler $700 for a television and sells it to a customer for $1,500.The markup on the television is:

_____ is the quantity of a product that will be offered to the market at various prices for a specified period.

Furr Friends sells kits for making personalized grave markers for pets.The company sells each kit for $25.The average variable cost for each kit is $10,and the total annual fixed costs for plant operation are $45,000.What is the break-even point in units?

Which of the following statements describes a limitation associated with break-even analysis?

When the NES Group lowered the price of its professional-grade meat slicers from $2,300 to $1,600,demand doubled from 4 units sold per month to 8 units per month.However,total revenue dropped.This is an example of:

An Overview of Marketing

Strategic Planning for Competitive Advantage

Ethics & Social Responsibility

The Marketing Environment

Developing a Global Vision

Consumer Decision Making

Business Marketing

Segmenting and Targeting Markets

Decision Support Systems and Marketing Research

Product Concepts

Developing and Managing Products

Services and Nonprofit Organization Marketing

Marketing Channels

Supply Chain Management

Retailing

Promotional Planning for Competitive Advantage

Advertising and Public Relations

Sales Promotion and Personal Selling

Setting the Right Price

Customer Relationship Management (CRM)

Filters

Exam 19: Pricing Concepts

Profit is equal to the price charged to customers multiplied by the number of units sold.

If the formula for elasticity results in a measure of elasticity (E)equal to 1,the increase in sales exactly offsets the decrease in price so that total revenue remains the same.

What is the impact of the Internet on pricing strategies?

When Apple Inc.originally introduced its iPhone it was priced at what many believed to be about as high as the market would allow.Within weeks Apple lowered the price of the iPhone.It appears that Apple Inc.entered the market with a _____ approach to pricing the iPhone.

Which of the following statements about the Internet is true?

Fixed cost contribution equals:

_____ occurs when an increase in sales exactly offsets a decrease in price so that total revenue remains exactly the same.

The price of the good or service is a key decision for a marketer because it most significantly and directly affects the product's:

The _____ is the quantity of a product that will be sold in the market at various prices for a specified time period,and _____ is the quantity of a product that will be offered to the market by suppliers at various prices for a specified period.

At a price of $1,192,057,the Bugatti Veyron may be the most expensive street legal car currently on the market today.Obviously,Bugatti is NOT using a _____ pricing objective in setting the price for this car.

What is the difference between fixed and variable costs? Give examples of each type of cost.

As long as the revenue of the last unit produced and sold is greater than the cost of the last unit produced and sold,a firm should:

Yield management systems are used to:

Cowboy Malone's Electric City pays a wholesaler $700 for a television and sells it to a customer for $1,500.The markup on the television is:

_____ is the quantity of a product that will be offered to the market at various prices for a specified period.

Furr Friends sells kits for making personalized grave markers for pets.The company sells each kit for $25.The average variable cost for each kit is $10,and the total annual fixed costs for plant operation are $45,000.What is the break-even point in units?

Which of the following statements describes a limitation associated with break-even analysis?

When the NES Group lowered the price of its professional-grade meat slicers from $2,300 to $1,600,demand doubled from 4 units sold per month to 8 units per month.However,total revenue dropped.This is an example of:

An Overview of Marketing

Strategic Planning for Competitive Advantage

Ethics & Social Responsibility

The Marketing Environment

Developing a Global Vision

Consumer Decision Making

Business Marketing

Segmenting and Targeting Markets

Decision Support Systems and Marketing Research

Product Concepts

Developing and Managing Products

Services and Nonprofit Organization Marketing

Marketing Channels

Supply Chain Management

Retailing

Promotional Planning for Competitive Advantage

Advertising and Public Relations

Sales Promotion and Personal Selling

Setting the Right Price

Customer Relationship Management (CRM)

Filters

The _ is the quantity of a product that will be sold in the market at various prices for a specified time period,and _ is the quantity of a product that will be offered to the market by suppliers at various prices for a specified period.