Question 1

Consumers' responsiveness or sensitivity to changes in prices is known as:

Accepted Answer

A)  break-even 
B)  equilibrium 
C)  unitary revenue 
D)  asymmetrical demand 
E)  elasticity of demand 
A)  break-even 
B)  equilibrium 
C)  unitary revenue 
D)  asymmetrical demand 
E)  elasticity of demand

Question 2

All of the following factors directly affect the elasticity of demand EXCEPT:

Accepted Answer

A)  other uses of a product 
B)  inputs needed to manufacture the product 
C)  availability of substitute goods 
D)  price relative to a consumer's purchasing power 
E)  product durability 
A)  other uses of a product 
B)  inputs needed to manufacture the product 
C)  availability of substitute goods 
D)  price relative to a consumer's purchasing power 
E)  product durability

Question 3

Khimaira Farms sells handcrafted cookie cutters.When graphed,the demand schedule for Khimaira Farms brand cookie cutters forms a straight line.If at $3 per cutter,500 cookie cutters are demanded,and at $4 per cutter,450 cookie cutters are ordered,how many will be ordered at a price of $6 per cutter?

Accepted Answer

A)  350 
B)  450 
C)  400 
D)  333 
E)  375 
A)  350 
B)  450 
C)  400 
D)  333 
E)  375

Question 4

_____ is a company's product sales as a percentage of total sales for that industry.

Accepted Answer

A)  Return on investment 
B)  Profit share 
C)  Revenue share 
D)  Market share 
E)  Contribution 
A)  Return on investment 
B)  Profit share 
C)  Revenue share 
D)  Market share 
E)  Contribution

Question 5

List five factors that affect elasticity of demand and briefly describe how each affects demand.

Accepted Answer

AVAILABILITY OF SUBSTITUTE GOODS AND SER

Question 6

Markup pricing,adding an amount to cost to cover expenses and profit,is one of the most common pricing methods used by intermediaries to establish a selling price.

Accepted Answer

A) True 
 B)False

Question 7

Adequate distribution for a new product is often obtained by reducing the size of the profit margin for its resellers.

Accepted Answer

A) True 
 B)False

Question 8

If the formula for elasticity results in a measure of elasticity (E)greater than 1,demand is said to be inelastic.

Accepted Answer

A) True 
 B)False

Question 9

A company using market share pricing has a _____ pricing objective.

Accepted Answer

A)  profit-oriented 
B)  sales-oriented 
C)  demand-oriented 
D)  supply-oriented 
E)  status quo 
A)  profit-oriented 
B)  sales-oriented 
C)  demand-oriented 
D)  supply-oriented 
E)  status quo

Question 10

A firm has maximized its profits when its marginal revenue exceeds its marginal cost.

Accepted Answer

A) True 
 B)False

Question 11

Profit maximization occurs when:

Accepted Answer

A)  total costs equals average fixed revenue 
B)  average variable costs are larger than average total costs 
C)  total costs equal total variable costs 
D)  marginal variable costs equal average revenues 
E)  marginal revenue equals marginal cost 
A)  total costs equals average fixed revenue 
B)  average variable costs are larger than average total costs 
C)  total costs equal total variable costs 
D)  marginal variable costs equal average revenues 
E)  marginal revenue equals marginal cost

Question 12

As a product moves through its life cycle,the demand for the product and the competitive conditions tend to change.For each stage in the product life cycle,discuss pricing strategies appropriate for that stage.

Accepted Answer

INTRODUCTION.Generally,prices are set hi

Question 13

If a company's pricing objective is to meet the competition or to maintain existing prices,it is using _____ pricing.

Accepted Answer

A)  head-on 
B)  target return on investment 
C)  status quo 
D)  market share 
E)  demand-oriented 
A)  head-on 
B)  target return on investment 
C)  status quo 
D)  market share 
E)  demand-oriented

Question 14

For convenience,pricing objectives can be divided into three categories.They are:

Accepted Answer

A)  refundable, competitive, and attainable 
B)  perceived, actual, and unique-situational 
C)  differentiated, niche, and undifferentiated 
D)  profit oriented, sales oriented, and status quo 
E)  monopolistic, fixed, and variable 
A)  refundable, competitive, and attainable 
B)  perceived, actual, and unique-situational 
C)  differentiated, niche, and undifferentiated 
D)  profit oriented, sales oriented, and status quo 
E)  monopolistic, fixed, and variable

Question 15

The point at which marginal cost and marginal revenue are equal always results in:

Accepted Answer

A)  maximization of elasticity 
B)  maximization of revenue 
C)  maximization of costs 
D)  maximization of profits 
E)  break-even equilibrium 
A)  maximization of elasticity 
B)  maximization of revenue 
C)  maximization of costs 
D)  maximization of profits 
E)  break-even equilibrium

Question 16

Price should not be used as a promotional tool.

Accepted Answer

A) True 
 B)False

Question 17

Allstate has more than 1,500 price levels that are determined by a complex algorithms that analyzes 16 credit report variables,including late payments and card balances.Allstate is using a _____ to set prices.

Accepted Answer

A)  yield management system 
B)  capacity correlation system 
C)  service forecasting tools 
D)  service management system 
E)  capacity maintenance tool 
A)  yield management system 
B)  capacity correlation system 
C)  service forecasting tools 
D)  service management system 
E)  capacity maintenance tool

Question 18

When a seller determines the selling price by adding to cost an amount for profit and expenses not previously accounted for,the seller is using _____ pricing.

Accepted Answer

A)  profit maximization 
B)  demand-oriented 
C)  break-even 
D)  target return 
E)  markup 
A)  profit maximization 
B)  demand-oriented 
C)  break-even 
D)  target return 
E)  markup

Question 19

Specialty Cakes
Imagine you're planning an after-symphony fund-raising party, and you need a life-size grand piano cake. Or, you are a developer proposing a new shopping center to a group of investors, and you want to serve a cake shaped like an architectural rendition of the center. Is this impossible? No, you just need to contact Cecilia Villaveces Cakes. She actually built a life-size grand piano for a gala in Macon, Georgia. You can expect to pay anywhere from $75 to $10,000 for one of Cecilia's artistic creations, depending on complexity of design and size. She uses only the best ingredients, and no two cakes are ever quite alike.
-Refer to Specialty Cakes.Which of the following is the BEST example of a variable cost for Cecilia Villaveces Cakes?

Accepted Answer

A)  life insurance on Cecilia 
B)  flour and sugar 
C)  ovens used for cooking cakes 
D)  business license 
E)  interest payment to the bank 
A)  life insurance on Cecilia 
B)  flour and sugar 
C)  ovens used for cooking cakes 
D)  business license 
E)  interest payment to the bank

Consumers' responsiveness or sensitivity to changes in prices is known as:

All of the following factors directly affect the elasticity of demand EXCEPT:

Khimaira Farms sells handcrafted cookie cutters.When graphed,the demand schedule for Khimaira Farms brand cookie cutters forms a straight line.If at $3 per cutter,500 cookie cutters are demanded,and at $4 per cutter,450 cookie cutters are ordered,how many will be ordered at a price of $6 per cutter?

_____ is a company's product sales as a percentage of total sales for that industry.

List five factors that affect elasticity of demand and briefly describe how each affects demand.

Markup pricing,adding an amount to cost to cover expenses and profit,is one of the most common pricing methods used by intermediaries to establish a selling price.

Adequate distribution for a new product is often obtained by reducing the size of the profit margin for its resellers.

If the formula for elasticity results in a measure of elasticity (E)greater than 1,demand is said to be inelastic.

A company using market share pricing has a _____ pricing objective.

A firm has maximized its profits when its marginal revenue exceeds its marginal cost.

Profit maximization occurs when:

As a product moves through its life cycle,the demand for the product and the competitive conditions tend to change.For each stage in the product life cycle,discuss pricing strategies appropriate for that stage.

If a company's pricing objective is to meet the competition or to maintain existing prices,it is using _____ pricing.

For convenience,pricing objectives can be divided into three categories.They are:

The point at which marginal cost and marginal revenue are equal always results in:

Price should not be used as a promotional tool.

Allstate has more than 1,500 price levels that are determined by a complex algorithms that analyzes 16 credit report variables,including late payments and card balances.Allstate is using a _____ to set prices.

When a seller determines the selling price by adding to cost an amount for profit and expenses not previously accounted for,the seller is using _____ pricing.

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

Consumers' responsiveness or sensitivity to changes in prices is known as:

All of the following factors directly affect the elasticity of demand EXCEPT:

_____ is a company's product sales as a percentage of total sales for that industry.

List five factors that affect elasticity of demand and briefly describe how each affects demand.

Markup pricing,adding an amount to cost to cover expenses and profit,is one of the most common pricing methods used by intermediaries to establish a selling price.

Adequate distribution for a new product is often obtained by reducing the size of the profit margin for its resellers.

If the formula for elasticity results in a measure of elasticity (E)greater than 1,demand is said to be inelastic.

A company using market share pricing has a _____ pricing objective.

A firm has maximized its profits when its marginal revenue exceeds its marginal cost.

Profit maximization occurs when:

As a product moves through its life cycle,the demand for the product and the competitive conditions tend to change.For each stage in the product life cycle,discuss pricing strategies appropriate for that stage.

If a company's pricing objective is to meet the competition or to maintain existing prices,it is using _____ pricing.

For convenience,pricing objectives can be divided into three categories.They are:

The point at which marginal cost and marginal revenue are equal always results in:

Price should not be used as a promotional tool.

Allstate has more than 1,500 price levels that are determined by a complex algorithms that analyzes 16 credit report variables,including late payments and card balances.Allstate is using a _____ to set prices.

When a seller determines the selling price by adding to cost an amount for profit and expenses not previously accounted for,the seller is using _____ pricing.

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