Question 1

change in total cost that results from producing and marketing one additional unit of product is referred to as

Accepted Answer

A)  fixed cost. 
B)  total cost. 
C)  marginal cost. 
D)  variable cost. 
E)  unit cost. 
A)  fixed cost. 
B)  total cost. 
C)  marginal cost. 
D)  variable cost. 
E)  unit cost. C

Question 2

Figure 13-2
-Figure 13-2 above represents the six steps in setting price."E" represents the step at which a firm would

Accepted Answer

A)  set list or quoted price. 
B)  select an approximate price level. 
C)  scan competitors for prices of similar products or services. 
D)  determine cost, volume, and profit relationships. 
E)  establish the price range. 
A)  set list or quoted price. 
B)  select an approximate price level. 
C)  scan competitors for prices of similar products or services. 
D)  determine cost, volume, and profit relationships. 
E)  establish the price range. A

Question 3

Westerlund owns a picture-framing shop,The Caplow Co.The average price she receives for a picture she frames for a customer is $120.This price must cover her costs for a typical framed picture,which consists of $5 for glass,$2 for matting,$13 for the frame,and $30 for the labor involved.She must also cover monthly expenses of $1,000 for rent and insurance,$200 for heat and electricity,$500 for advertising,and $3,500 for her salary.Assuming there is no change in price or the quantity demanded,if Westerlund wants to increase her advertising expenses to a total of $1,000 (a $500 increase),this would cause total costs to __________ and the break-even quantity to __________.

Accepted Answer

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

Question 4

Washburn Guitars markets its guitars to four distinct market segments.The firm's batch-custom products instruments are targeted at

Accepted Answer

A)  first-time buyers. 
B)  professional musicians. 
C)  stars and famous musicians. 
D)  large institutional buyers such as band programs. 
E)  intermediate-skill players who may become professional musicians. 
A)  first-time buyers. 
B)  professional musicians. 
C)  stars and famous musicians. 
D)  large institutional buyers such as band programs. 
E)  intermediate-skill players who may become professional musicians.

Question 5

Figure 13-12
-According to Figure 13-12 above,how much profit will the firm make if it sells 400 pictures?

Accepted Answer

A)  $48,000 
B)  $35,000 
C)  $20,000 
D)  $32,000 
E)  $0 
A)  $48,000 
B)  $35,000 
C)  $20,000 
D)  $32,000 
E)  $0

Question 6

Pizza Hut announced it was going to add 25 percent more toppings to its Meat Lover's line of pizzas without increasing prices,what consumer motivation was it appealing to?

Accepted Answer

A)  cost 
B)  appearance 
C)  value 
D)  price 
E)  quality 
A)  cost 
B)  appearance 
C)  value 
D)  price 
E)  quality

Question 7

1 of the price-setting process identifies pricing objectives and constraints.Describe the constraints a firm is likely to face.

Accepted Answer

Pricing constraints are factors that lim

Question 8

Tesla Roadster Sport Photo
-Suppose you want to get "plugged in" and buy a 2011 Tesla Roadster Sport (see the photo above),the world's leading all-electric,zero-emission car that has a 245-mile range and can be recharged in three hours.The Tesla Roadster Sport has a list price of $110,000,but you want several options (leather interior,carbon fiber hard top,electronics upgrade,metallic paint,performance wheels,and others)that will cost $20,000.An extended warranty will add an additional $5,000.However,if you put $50,000 down now and finance the balance over the next year,you will receive a dealer rebate of $3,500 off the list price.The dealer will give you a $4,000 trade-in allowance for your 2005 Honda Civic DX four-door sedan.In addition,you will have to pay a state sales tax of $10,000,an auto registration fee of $500 to the state,and a $500 destination charge to ship the car.But because the Tesla Roadster Sport is an alternative energy vehicle,you qualify for a $2,500 state rebate and a $7,500 federal tax credit! Finally,your total finance charge is $2,500.Applying the price equation,what is your final price for the Tesla Roadster Sport?

Accepted Answer

A)  $54,000 
B)  $89,000 
C)  $110,000 
D)  $131,000 
E)  $166,000 
A)  $54,000 
B)  $89,000 
C)  $110,000 
D)  $131,000 
E)  $166,000

Question 9

Which of the following illustrates a shift in the demand curve?

Accepted Answer

A)  When prices remain the same, there is a significant decrease in demand. 
B)  As the price is raised, the quantity demanded increases, assuming all else stays the same. 
C)  When prices remain the same, there is an increase or decrease in demand. 
D)  As the price is lowered, the quantity demanded decreases, assuming all else stays the same. 
E)  Movement along the curve indicates that some significant event has taken place outside the organization that has affected demand. 
A)  When prices remain the same, there is a significant decrease in demand. 
B)  As the price is raised, the quantity demanded increases, assuming all else stays the same. 
C)  When prices remain the same, there is an increase or decrease in demand. 
D)  As the price is lowered, the quantity demanded decreases, assuming all else stays the same. 
E)  Movement along the curve indicates that some significant event has taken place outside the organization that has affected demand.

Question 10

Figure 13-4
-Figure 13-4 above,column "B" represents which type of competitive market?

Accepted Answer

A)  pure monopoly 
B)  oligopoly 
C)  monopolistic competition 
D)  pure competition 
E)  monopolistic oligopoly 
A)  pure monopoly 
B)  oligopoly 
C)  monopolistic competition 
D)  pure competition 
E)  monopolistic oligopoly

Question 11

Which of the following is a typical example of a variable cost?

Accepted Answer

A)  cost of maintaining inventory 
B)  rent on a building 
C)  executive salaries 
D)  insurance premiums 
E)  lease on delivery trucks 
A)  cost of maintaining inventory 
B)  rent on a building 
C)  executive salaries 
D)  insurance premiums 
E)  lease on delivery trucks

Question 12

over 300 million customers,__________ is the world's largest mobile phone market and is adding 5 million new customers a month.

Accepted Answer

A)  India 
B)  Russia 
C)  China 
D)  the European Union 
E)  the United States 
A)  India 
B)  Russia 
C)  China 
D)  the European Union 
E)  the United States

Question 13

is the difference between fixed costs and variable costs?

Accepted Answer

Fixed cost is the sum of the expenses of

Question 14

average price Washburn charges for a guitar is $349.This price must cover its variable costs of $25 for direct materials and $120 in direct labor.It must also cover fixed expenses of $38,000.Assuming everything else stays the same,the company's planned move to Nashville,Tennessee,will reduce its fixed costs by $4,800.This would cause total costs 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 15

firm's profit equation demonstrates that profit equals __________.

Accepted Answer

A)  Total cost + Total revenue 
B)  Total revenue − Total cost 
C)  Marginal revenue − Marginal cost 
D)  Price × Quantity 
E)  Total revenue + Total cost 
A)  Total cost + Total revenue 
B)  Total revenue − Total cost 
C)  Marginal revenue − Marginal cost 
D)  Price × Quantity 
E)  Total revenue + Total cost

Question 16

monopoly is the competitive market situation where

Accepted Answer

A)  many sellers follow market price for identical, commodity products. 
B)  one seller sets the price for a unique product. 
C)  few sellers are sensitive to one another's prices. 
D)  many sellers compete on nonprice factors. 
E)  one or few sellers compete solely on nonprice factors. 
A)  many sellers follow market price for identical, commodity products. 
B)  one seller sets the price for a unique product. 
C)  few sellers are sensitive to one another's prices. 
D)  many sellers compete on nonprice factors. 
E)  one or few sellers compete solely on nonprice factors.

Question 17

reference value __________.

Accepted Answer

A)  is relative to the amount of time and energy a consumer puts into the purchase process 
B)  is based upon the value assigned to similar items used by the consumer's peers 
C)  results from performing a careful break-even analysis 
D)  involves comparing the costs and benefits of substitute items 
E)  is based upon the differential between customers' "needs" and their "wants" 
A)  is relative to the amount of time and energy a consumer puts into the purchase process 
B)  is based upon the value assigned to similar items used by the consumer's peers 
C)  results from performing a careful break-even analysis 
D)  involves comparing the costs and benefits of substitute items 
E)  is based upon the differential between customers' "needs" and their "wants"

Question 18

Westerlund owns a picture-framing shop,The Caplow Co.The average price she receives for a picture she frames for a customer is $120.This price must cover her costs for a typical framed picture,which consists of $5 for glass,$2 for matting,$13 for the frame,and $30 for the labor involved.She must also cover monthly expenses of $1,000 for rent and insurance,$200 for heat and electricity,$500 for advertising,and $3,500 for her salary.Westerlund is considering buying an automatic matte-cutting machine in order to reduce the number of hours of direct labor required to produce a framed picture.In considering this purchase,she should recognize this purchase will __________ Caplow's variable cost and __________ Caplow's fixed cost.

Accepted Answer

A)  decrease; increase 
B)  decrease; decrease 
C)  increase; decrease 
D)  increase; increase 
E)  have no effect on; have no effect on 
A)  decrease; increase 
B)  decrease; decrease 
C)  increase; decrease 
D)  increase; increase 
E)  have no effect on; have no effect on

Question 19

Which of the following statements most likely would account for the shift in the demand curve from D1 to D2 shown in Figure 13-5B above?

Accepted Answer

A)  The firm increased its prices and consumers perceived the value of the product to be greater. 
B)  There were more product substitutes available in the marketplace. 
C)  Competitors in the market lowered their prices. 
D)  A downward economic shift caused a proportionate change in consumer income. 
E)  The firm's price remained the same but changes occurred in consumer tastes. 
A)  The firm increased its prices and consumers perceived the value of the product to be greater. 
B)  There were more product substitutes available in the marketplace. 
C)  Competitors in the market lowered their prices. 
D)  A downward economic shift caused a proportionate change in consumer income. 
E)  The firm's price remained the same but changes occurred in consumer tastes.

Question 20

StubHub's pricing formula is to

Accepted Answer

A)  charge an escalating commission percentage based on the value of the ticket sold. 
B)  deduct a flat fee of $25 for every ticket sold regardless of its value. 
C)  charge a commission to both buyers and sellers of the tickets sold on its website. 
D)  include special surcharges for enabling prospective buyers to view, in 3D 360° streaming video on its YouTube channel, the seats at stadiums, concert halls, and other venues for the events they are interested in. 
E)  deduct the sales tax from the purchase of tickets based on the states where such taxes must be collected and forwarded. 
A)  charge an escalating commission percentage based on the value of the ticket sold. 
B)  deduct a flat fee of $25 for every ticket sold regardless of its value. 
C)  charge a commission to both buyers and sellers of the tickets sold on its website. 
D)  include special surcharges for enabling prospective buyers to view, in 3D 360° streaming video on its YouTube channel, the seats at stadiums, concert halls, and other venues for the events they are interested in. 
E)  deduct the sales tax from the purchase of tickets based on the states where such taxes must be collected and forwarded.

change in total cost that results from producing and marketing one additional unit of product is referred to as

Figure 13-2 -Figure 13-2 above represents the six steps in setting price."E" represents the step at which a firm would

Washburn Guitars markets its guitars to four distinct market segments.The firm's batch-custom products instruments are targeted at

Figure 13-12 -According to Figure 13-12 above,how much profit will the firm make if it sells 400 pictures?

Pizza Hut announced it was going to add 25 percent more toppings to its Meat Lover's line of pizzas without increasing prices,what consumer motivation was it appealing to?

1 of the price-setting process identifies pricing objectives and constraints.Describe the constraints a firm is likely to face.

Which of the following illustrates a shift in the demand curve?

Figure 13-4 -Figure 13-4 above,column "B" represents which type of competitive market?

Which of the following is a typical example of a variable cost?

over 300 million customers,__________ is the world's largest mobile phone market and is adding 5 million new customers a month.

is the difference between fixed costs and variable costs?

firm's profit equation demonstrates that profit equals __________.

monopoly is the competitive market situation where

reference value __________.

Which of the following statements most likely would account for the shift in the demand curve from D₁ to D₂shown in Figure 13-5B above?

StubHub's pricing formula is to

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 Multi-Channel Marketing

Pulling It All Together: The Strategic Marketing Process

Filters

Exam 13: Building the Price Foundation

change in total cost that results from producing and marketing one additional unit of product is referred to as

Figure 13-2 -Figure 13-2 above represents the six steps in setting price."E" represents the step at which a firm would

Washburn Guitars markets its guitars to four distinct market segments.The firm's batch-custom products instruments are targeted at

Figure 13-12 -According to Figure 13-12 above,how much profit will the firm make if it sells 400 pictures?

Pizza Hut announced it was going to add 25 percent more toppings to its Meat Lover's line of pizzas without increasing prices,what consumer motivation was it appealing to?

1 of the price-setting process identifies pricing objectives and constraints.Describe the constraints a firm is likely to face.

Which of the following illustrates a shift in the demand curve?

Figure 13-4 -Figure 13-4 above,column "B" represents which type of competitive market?

Which of the following is a typical example of a variable cost?

over 300 million customers,__________ is the world's largest mobile phone market and is adding 5 million new customers a month.

is the difference between fixed costs and variable costs?

firm's profit equation demonstrates that profit equals __________.

monopoly is the competitive market situation where

reference value __________.

Which of the following statements most likely would account for the shift in the demand curve from D1 to D2 shown in Figure 13-5B above?

StubHub's pricing formula is to

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 Multi-Channel Marketing

Pulling It All Together: The Strategic Marketing Process

Filters

Which of the following statements most likely would account for the shift in the demand curve from D₁ to D₂shown in Figure 13-5B above?