Question 1

How have price comparison websites like Pricegrabber.com affected marketers' pricing strategies?

Accepted Answer

Consumers now have a wealth of easily-ac

Question 2

One problem in relying on price elasticity and demand curves when setting prices is that:

Accepted Answer

A) the way a product or service is marketed can have a profound impact on price elasticity. 
B) the underlying ideas of the demand curve and elasticity are less relevant in the modern economy. 
C) only economists can properly analyze demand curves and set prices using this tool. 
D) competitors can construct the same demand curves,so there is no advantage in using them. 
E) marketing split from economics over the ideas of demand and elasticity. 
A) the way a product or service is marketed can have a profound impact on price elasticity. 
B) the underlying ideas of the demand curve and elasticity are less relevant in the modern economy. 
C) only economists can properly analyze demand curves and set prices using this tool. 
D) competitors can construct the same demand curves,so there is no advantage in using them. 
E) marketing split from economics over the ideas of demand and elasticity.

Question 3

How can a company find its way out of a market characterized by pure competition?

Accepted Answer

A) Consistently offer the lowest price until other competitors leave the market. 
B) Increase prices and attract different,quality-oriented customers. 
C) Decrease the amount of available product until the market reacts. 
D) Increase the amount of available product to flood the market. 
E) Differentiate the product in some way,even by packaging,so customers will see it as distinct. 
A) Consistently offer the lowest price until other competitors leave the market. 
B) Increase prices and attract different,quality-oriented customers. 
C) Decrease the amount of available product until the market reacts. 
D) Increase the amount of available product to flood the market. 
E) Differentiate the product in some way,even by packaging,so customers will see it as distinct.

Question 4

Frank's Heating and Air Conditioning Company specializes in electric heat pumps.Frank keeps track of the price of natural gas,knowing that:

Accepted Answer

A) natural gas creates more environmental greenhouse effects than coal. 
B) an increase in the price of natural gas will increase demand for his electrical heating systems. 
C) gas heating systems and electrical heating systems are complementary goods. 
D) when the price of natural gas goes up,the quantity demanded also rises. 
E) the demand for natural gas is price elastic. 
A) natural gas creates more environmental greenhouse effects than coal. 
B) an increase in the price of natural gas will increase demand for his electrical heating systems. 
C) gas heating systems and electrical heating systems are complementary goods. 
D) when the price of natural gas goes up,the quantity demanded also rises. 
E) the demand for natural gas is price elastic.

Question 5

Liz and Sarah watched the prices of all the ingredients in their line of specialty sauces go up and up.Now,transportation costs were going through the roof.Liz suggested they could raise prices to cover these expenses because customers would understand.Which of these is the most important factor Liz and Sarah should consider before raising prices?

Accepted Answer

A) The costs might go back down again. 
B) They will have to adjust their promotional literature. 
C) Customers do not care about the company's costs; they care about value. 
D) Rental costs for their production facility might go up next. 
E) Consumers do not think about the cost of additional items; they are concerned mostly with the total cost for a visit to a store. 
A) The costs might go back down again. 
B) They will have to adjust their promotional literature. 
C) Customers do not care about the company's costs; they care about value. 
D) Rental costs for their production facility might go up next. 
E) Consumers do not think about the cost of additional items; they are concerned mostly with the total cost for a visit to a store.

Question 6

Dean runs a woodworking business specializing in kitchen cabinets.He knows there are other firms with top-of-the-line machinery that make better quality cabinets,but he does well and has a constant flow of business.Dean obviously has:

Accepted Answer

A) figured out how to produce cheap products. 
B) priced his products well. 
C) reduced his variable costs by investing in fixed costs. 
D) avoided monopolistic competition,and is instead in a market with pure competition. 
E) learned how to use status quo pricing. 
A) figured out how to produce cheap products. 
B) priced his products well. 
C) reduced his variable costs by investing in fixed costs. 
D) avoided monopolistic competition,and is instead in a market with pure competition. 
E) learned how to use status quo pricing.

Question 7

If a firm is engaged in monopolistic competition,it should seek a way to differentiate itself.

Accepted Answer

A) True 
 B)False

Question 8

Chet knows that the pro shops selling his tennis racquets will "keystone" his product.He also knows sales will decline significantly if the retail price is greater than $100.What is the maximum wholesale price Chet can charge?

Accepted Answer

Keystoning means selling the p

Question 9

Price is the cash expenditure plus taxes that consumers have to pay for a good or service.

Accepted Answer

A) True 
 B)False

Question 10

Developing a good pricing strategy is essential to the financial well-being of a firm.Even though a firm has an excellent strategy,what are continuing threats to the strategy?

Accepted Answer

Economic conditions,changes in

Question 11

The Internet has decreased consumers' price sensitivity.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is the most logical example of complementary products?

Accepted Answer

A) Hot dogs and hamburgers. 
B) VCRs and DVD players. 
C) Hot dogs and hot dog buns. 
D) Honda cars and Toyota cars. 
E) A brick-and-mortar university and an online university. 
A) Hot dogs and hamburgers. 
B) VCRs and DVD players. 
C) Hot dogs and hot dog buns. 
D) Honda cars and Toyota cars. 
E) A brick-and-mortar university and an online university.

Question 13

If a 1 percent decrease in price results in less than a 1 percent increase in the quantity demanded,demand is:

Accepted Answer

A) cross-price elastic. 
B) price inelastic. 
C) price elastic. 
D) status quo elasticity. 
E) derived demand inelastic. 
A) cross-price elastic. 
B) price inelastic. 
C) price elastic. 
D) status quo elasticity. 
E) derived demand inelastic.

Question 14

Price elasticity of demand is the:

Accepted Answer

A) percentage change in quantity demanded divided by the percentage change in price. 
B) percentage change in price divided by percentage change in quantity demanded. 
C) change in price divided by change in quantity demanded. 
D) change in quantity demanded divided by the change in price. 
E) change in quantity demanded multiplied by the change in price. 
A) percentage change in quantity demanded divided by the percentage change in price. 
B) percentage change in price divided by percentage change in quantity demanded. 
C) change in price divided by change in quantity demanded. 
D) change in quantity demanded divided by the change in price. 
E) change in quantity demanded multiplied by the change in price.

Question 15

At the break-even point:

Accepted Answer

A) costs are zero. 
B) price is maximized. 
C) profits are zero. 
D) fixed costs are zero. 
E) contribution per unit is zero. 
A) costs are zero. 
B) price is maximized. 
C) profits are zero. 
D) fixed costs are zero. 
E) contribution per unit is zero.

Question 16

Brian knows his firm's pricing strategy needs to be consistent with the company's overall objectives.As marketing manager,Brian will base his pricing strategy on whether the company's objective is to:

Accepted Answer

A) increase profits. 
B) increase sales. 
C) decrease competition. 
D) build customer satisfaction. 
E) any of these. 
A) increase profits. 
B) increase sales. 
C) decrease competition. 
D) build customer satisfaction. 
E) any of these.

Question 17

In many high-end resort markets,Westin hotels compete directly with Crown Plaza hotels.Each firm weighs the comparative advantages and disadvantages of their offerings to determine whether to price above,equal to,or below the other hotel.In these markets,the hotels are using a _______________ pricing strategy.

Accepted Answer

A) maximizing profits 
B) target profit 
C) target return 
D) competitive parity 
E) sales oriented 
A) maximizing profits 
B) target profit 
C) target return 
D) competitive parity 
E) sales oriented

Question 18

Bill is a yacht broker in the southeastern United States.For years he has had difficulty selling large yachts locally because there were few places to dock these boats.Yachts and spaces to dock them are an example of:

Accepted Answer

A) substitute products. 
B) purely competitive products. 
C) status quo pricing products. 
D) complementary products. 
E) competitive parity products. 
A) substitute products. 
B) purely competitive products. 
C) status quo pricing products. 
D) complementary products. 
E) competitive parity products.

Question 19

Brandon is conducting an experiment,charging different prices for the same products at different stores and measuring sales.With this information,he will construct a demand curve.How can Brandon use this information?

Accepted Answer

He can use this information to estimate

Question 20

Karen initially charged $80 for an hour-long massage and averaged 20 clients per week.When she raised her price to $100,the number of massages decreased to 15 per week.What is the price elasticity of demand for her service?

Accepted Answer

Price elasticity of demand is the percen

How have price comparison websites like Pricegrabber.com affected marketers' pricing strategies?

One problem in relying on price elasticity and demand curves when setting prices is that:

How can a company find its way out of a market characterized by pure competition?

Frank's Heating and Air Conditioning Company specializes in electric heat pumps.Frank keeps track of the price of natural gas,knowing that:

Dean runs a woodworking business specializing in kitchen cabinets.He knows there are other firms with top-of-the-line machinery that make better quality cabinets,but he does well and has a constant flow of business.Dean obviously has:

If a firm is engaged in monopolistic competition,it should seek a way to differentiate itself.

Chet knows that the pro shops selling his tennis racquets will "keystone" his product.He also knows sales will decline significantly if the retail price is greater than $100.What is the maximum wholesale price Chet can charge?

Price is the cash expenditure plus taxes that consumers have to pay for a good or service.

Developing a good pricing strategy is essential to the financial well-being of a firm.Even though a firm has an excellent strategy,what are continuing threats to the strategy?

The Internet has decreased consumers' price sensitivity.

Which of the following is the most logical example of complementary products?

If a 1 percent decrease in price results in less than a 1 percent increase in the quantity demanded,demand is:

Price elasticity of demand is the:

At the break-even point:

Brian knows his firm's pricing strategy needs to be consistent with the company's overall objectives.As marketing manager,Brian will base his pricing strategy on whether the company's objective is to:

Bill is a yacht broker in the southeastern United States.For years he has had difficulty selling large yachts locally because there were few places to dock these boats.Yachts and spaces to dock them are an example of:

Brandon is conducting an experiment,charging different prices for the same products at different stores and measuring sales.With this information,he will construct a demand curve.How can Brandon use this information?

Karen initially charged $80 for an hour-long massage and averaged 20 clients per week.When she raised her price to $100,the number of massages decreased to 15 per week.What is the price elasticity of demand for her service?

Overview of Marketing

Developing Marketing Strategies and a Marketing Plan

Marketing Ethics

Analyzing the Marketing Environment

Consumer Behavior

Business-To-Business Marketing

Global Marketing

Segmentation, Targeting, and Positioning

Marketing Research

Product, Branding, and Packaging Decisions

Developing New Products

Services: The Intangible Product

Strategic Pricing Methods

Value Delivery: Designing the Channel and Supply Chain

Retailing and Multichannel Marketing

Integrated Marketing Communications

Advertising,public Relations,and Sales Promotions

Personal Selling and Sales Management

Filters

Exam 13: Pricing Concepts for Establishing Value

How have price comparison websites like Pricegrabber.com affected marketers' pricing strategies?

One problem in relying on price elasticity and demand curves when setting prices is that:

How can a company find its way out of a market characterized by pure competition?

Frank's Heating and Air Conditioning Company specializes in electric heat pumps.Frank keeps track of the price of natural gas,knowing that:

Dean runs a woodworking business specializing in kitchen cabinets.He knows there are other firms with top-of-the-line machinery that make better quality cabinets,but he does well and has a constant flow of business.Dean obviously has:

If a firm is engaged in monopolistic competition,it should seek a way to differentiate itself.

Chet knows that the pro shops selling his tennis racquets will "keystone" his product.He also knows sales will decline significantly if the retail price is greater than $100.What is the maximum wholesale price Chet can charge?

Price is the cash expenditure plus taxes that consumers have to pay for a good or service.

Developing a good pricing strategy is essential to the financial well-being of a firm.Even though a firm has an excellent strategy,what are continuing threats to the strategy?

The Internet has decreased consumers' price sensitivity.

Which of the following is the most logical example of complementary products?

If a 1 percent decrease in price results in less than a 1 percent increase in the quantity demanded,demand is:

Price elasticity of demand is the:

At the break-even point:

Brian knows his firm's pricing strategy needs to be consistent with the company's overall objectives.As marketing manager,Brian will base his pricing strategy on whether the company's objective is to:

Bill is a yacht broker in the southeastern United States.For years he has had difficulty selling large yachts locally because there were few places to dock these boats.Yachts and spaces to dock them are an example of:

Brandon is conducting an experiment,charging different prices for the same products at different stores and measuring sales.With this information,he will construct a demand curve.How can Brandon use this information?

Karen initially charged $80 for an hour-long massage and averaged 20 clients per week.When she raised her price to $100,the number of massages decreased to 15 per week.What is the price elasticity of demand for her service?

Overview of Marketing

Developing Marketing Strategies and a Marketing Plan

Marketing Ethics

Analyzing the Marketing Environment

Consumer Behavior

Business-To-Business Marketing

Global Marketing

Segmentation, Targeting, and Positioning

Marketing Research

Product, Branding, and Packaging Decisions

Developing New Products

Services: The Intangible Product

Strategic Pricing Methods

Value Delivery: Designing the Channel and Supply Chain

Retailing and Multichannel Marketing

Integrated Marketing Communications

Advertising,public Relations,and Sales Promotions

Personal Selling and Sales Management

Filters