Question 1

Total variable costs divided by quantity of output equals:

Accepted Answer

A)  average total cost 
B)  mean intermittent cost 
C)  fixed cost 
D)  marginal cost 
E)  average variable cost 
A)  average total cost 
B)  mean intermittent cost 
C)  fixed cost 
D)  marginal cost 
E)  average variable cost

Question 2

Central Bark is a dog resort where pets are pampered.Which of the following is the BEST example of one of its fixed costs?

Accepted Answer

A)  Payment on the building used by Central Bark 
B)  Dog biscuits 
C)  Dog collars and leashes 
D)  Bubble bath 
E)  Advertisements in local magazines 
A)  Payment on the building used by Central Bark 
B)  Dog biscuits 
C)  Dog collars and leashes 
D)  Bubble bath 
E)  Advertisements in local magazines

Question 3

American Girl Doll
The American Girl catalog began as a concept to introduce today's girls to those who lived in the past. Each historically accurate doll is carefully crafted and dressed and has books to describe her life. For example, Kristen is an 1854 pioneer girl who is growing up in Minnesota. Her story begins with her long sea voyage from Sweden. The basic doll, dressed in a calico dress and striped apron plus the hardcover story of how she got to Minnesota, costs $90.00. Six more hardback books of Kristen's life are available for $74.95. Kristen's nightgown costs $20.00, and a matching one for the doll owner is an additional $38.00. Buy both together and the price is only $50.00. A hand-painted wooden bed and trunk for Kristen are available for $213.00. Shipping costs vary with the price of the merchandise ordered.
-Refer to American Girl Doll.Based on the information in the narrative,which of the following factors is most likely to affect the elasticity of demand for the doll?

Accepted Answer

A)  The absence of substitutes 
B)  The existence of complementary products 
C)  The price relative to purchasing power 
D)  Product durability 
E)  A variety of alternative uses for the product 
A)  The absence of substitutes 
B)  The existence of complementary products 
C)  The price relative to purchasing power 
D)  Product durability 
E)  A variety of alternative uses for the product

Question 4

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 5

When the price of a product is set at a level where demand and supply are the same,price _____ has been achieved.

Accepted Answer

A)  equilibrium 
B)  stability 
C)  leverage 
D)  symmetry 
E)  status quo 
A)  equilibrium 
B)  stability 
C)  leverage 
D)  symmetry 
E)  status quo

Question 6

Specialty Cakes
Imagine that 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.Many party planners in the Southeast will only use Cecilia Villaveces Cakes at their parties--no matter what the price is.They know that Cecilia's cakes can make a party a success.Moreover,the cakes are what people remember most about the parties.From this description,you should assume Cecilia Villaveces Cakes have a(n):

Accepted Answer

A)  elastic demand. 
B)  unitary elasticity. 
C)  inelastic supply. 
D)  inelastic demand. 
E)  elastic supply. 
A)  elastic demand. 
B)  unitary elasticity. 
C)  inelastic supply. 
D)  inelastic demand. 
E)  elastic supply.

Question 7

High purchase prices may create feelings of pleasure and excitement in consumers.

Accepted Answer

A) True 
 B)False

Question 8

Calculate answers for the following scenarios if retailer markups are based on their selling price:

Accepted Answer

The dollar markup is calculated as selli

Question 9

When the NES Group lowered the price of its professional-grade meat slicers from $2,300 to $1,600,demand doubled from four units sold per month to eight 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

Question 10

What happens when demand is elastic?

Accepted Answer

A)  As price goes up, revenue goes down. 
B)  As price goes down, revenue goes down. 
C)  As price goes up, revenue goes up. 
D)  As price goes up, revenue does not change. 
E)  As price goes down, revenue does not change. 
A)  As price goes up, revenue goes down. 
B)  As price goes down, revenue goes down. 
C)  As price goes up, revenue goes up. 
D)  As price goes up, revenue does not change. 
E)  As price goes down, revenue does not change.

Question 11

What are the problems associated with the use of a cost-based pricing strategy? What contribution does cost make to the setting of prices?

Accepted Answer

Setting prices based solely on costs ign

Question 12

The quantity of a product that will be sold in the market at various prices for a specified period is called:

Accepted Answer

A)  market share. 
B)  demand. 
C)  supply. 
D)  value. 
E)  revenue. 
A)  market share. 
B)  demand. 
C)  supply. 
D)  value. 
E)  revenue.

Question 13

The owner of specialty kitchen retail store wants to determine what price she should put on a set of mixing bowls.They cost her $7.She desires a markup of 30 percent based on selling price.Which of the following is closest to the price she should charge her customers?

Accepted Answer

A)  $19 
B)  $12 
C)  $15 
D)  $10 
E)  $18 
A)  $19 
B)  $12 
C)  $15 
D)  $10 
E)  $18

Question 14

When Insight Research Associates quotes a marketing research project,management will first estimate the cost to conduct the research and produce and deliver the final client report.The next step in determining the price is to add 30 percent to that cost estimate.This becomes the price estimate given to the potential research client.This suggests that Insight Research Associates uses a(n)_____ pricing objective.

Accepted Answer

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

Question 15

Prices generally begin to stabilize:

Accepted Answer

A)  as a product enters the growth stage. 
B)  when a product if first introduced onto the market. 
C)  as a result of keystoning. 
D)  when a product enters the decline stage of the life cycle. 
E)  in hotly competitive markets. 
A)  as a product enters the growth stage. 
B)  when a product if first introduced onto the market. 
C)  as a result of keystoning. 
D)  when a product enters the decline stage of the life cycle. 
E)  in hotly competitive markets.

Question 16

Unitary elasticity means that an increase in sales exactly offsets a decrease in prices,so total revenue remains the same.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

AVAILABILITY OF SUBSTITUTES.When many pr

Question 18

Define elasticity of demand and compare and contrast the three types of demand: elastic,inelastic,and unitary.What would the demand curve for elastic and inelastic demand look like when graphed?

Accepted Answer

Elasticity of demand refers to consumers

Question 19

_____ is the practice of marking up prices by 100 percent (or doubling the cost to set the selling price).

Accepted Answer

A)  Margin pricing 
B)  Keystoning 
C)  Mark-on adding 
D)  Formula doubling 
E)  Symmetrical pricing 
A)  Margin pricing 
B)  Keystoning 
C)  Mark-on adding 
D)  Formula doubling 
E)  Symmetrical pricing

Question 20

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

Exam 37: Pricing Concepts

Total variable costs divided by quantity of output equals:

Central Bark is a dog resort where pets are pampered.Which of the following is the BEST example of one of its fixed costs?

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

When the price of a product is set at a level where demand and supply are the same,price _____ has been achieved.

High purchase prices may create feelings of pleasure and excitement in consumers.

Calculate answers for the following scenarios if retailer markups are based on their selling price:

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

What happens when demand is elastic?

What are the problems associated with the use of a cost-based pricing strategy? What contribution does cost make to the setting of prices?

The quantity of a product that will be sold in the market at various prices for a specified period is called:

The owner of specialty kitchen retail store wants to determine what price she should put on a set of mixing bowls.They cost her $7.She desires a markup of 30 percent based on selling price.Which of the following is closest to the price she should charge her customers?

Prices generally begin to stabilize:

Unitary elasticity means that an increase in sales exactly offsets a decrease in prices,so total revenue remains the same.

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

Define elasticity of demand and compare and contrast the three types of demand: elastic,inelastic,and unitary.What would the demand curve for elastic and inelastic demand look like when graphed?

_____ is the practice of marking up prices by 100 percent (or doubling the cost to set the selling price).

Yield management systems are used to:

An Overview of Marketing

Case Study Girl Scout Cookies

Strategic Planning for Competitive Advantage

Case Study Disney: The Happiest Brand on Earth

Ethics and Social Responsibility

Case Study Barclays Bank: Banking on Ethics

The Marketing Environment

Case Study Daimler/BMW: A New Breed of Driver

Developing a Global Vision

Case Study P&G Unilever Panasonic: The $2-a-Day Initiative

Consumer Decision Making

Case Study eBay: Creating Customers on the Move

Business Marketing

Case Study Pantone: This Year’s Color: Honeysuckle

Segmenting and Targeting Markets

Coke Zero

Marketing Research

Case Study Marriott International: A Marriott Site for Those on the Move

Product Concepts

Case Study Ford Motor Co.: One Ford; One Big Turnaround

Developing and Managing Products

Case Study Harmonix: Embrace Your Inner Rock Star

Services and Nonprofit Organization Marketing

Minute Clinic

Supply Chain Management

The U.S.Transportation Industry: Planning for a Potential Post-Recession Capacity Crunch

Marketing Channels and Retailing

Nordstrom's

Marketing Communications

HBO's True Blood

Advertising Public Relations and Sales Promotion

Burger King

Personal Selling and Sales Management

Ron Popeil

Social Media and Marketing

Facebook: Advertising’s Troubling Future

Groupon vs.LivingSocial: Coupon Wars

Setting the Right Price

Black Friday Sales: Deal…or No Deal?

Telekom Austria Group: Sustainability to Increase Value

Mary Kay Inc: Taps into a Changing Demographic

Prestige Brands Inc-Transforming the Business

Cutco Cutlery Corporation: Direct to Consumer for Over 60 Years!

Lap Dance at Boston Blazers Lacrosse Game: Promotional Mistake or Creative Genius?

Will a New Reservation System Translate to Higher Prices for Travelers?

Concerns over Sustainability Result in Social Media Disaster for Nestlé

Four Loko Targets Young College Hedonists

McAfee Virus Protection Update Crashes Computers Worldwide

Microsoft Implies Distribution of Angry Birds on Windows Phone 7

Yellow Tail’s Tails-for-Tails Campaign

Concerns over Sustainability Result in Social Media Disaster for Nestlé

Filters