Question 1

Which of the following statements regarding price changes is most accurate?

Accepted Answer

A)  Product prices should change monthly, whereas services prices should change quarterly. 
B)  Changing a product's price too frequently creates antagonism among consumers, yet changing prices too infrequently makes them feel the company is not improving its product or service sufficiently. 
C)  Supermarkets should change their prices every week since customers are expecting new prices in the weekly flyers they receive in the mail. 
D)  Companies selling products over the Internet can instantly change their prices whenever the need arises. 
E)  Internet price changes are regulated by the Internet Fair Practices Act to protect consumers against price gouging. 
A)  Product prices should change monthly, whereas services prices should change quarterly. 
B)  Changing a product's price too frequently creates antagonism among consumers, yet changing prices too infrequently makes them feel the company is not improving its product or service sufficiently. 
C)  Supermarkets should change their prices every week since customers are expecting new prices in the weekly flyers they receive in the mail. 
D)  Companies selling products over the Internet can instantly change their prices whenever the need arises. 
E)  Internet price changes are regulated by the Internet Fair Practices Act to protect consumers against price gouging.

Question 2

Figure 13-4
-Using Figure 13-4 above,how much price competition is likely for bushels of wheat?

Accepted Answer

A)  There is a range of prices at which to sell. 
B)  The market sets the price so there is no price competition. 
C)  There is a price leader in the farming industry that sets the price. 
D)  Since there is only one seller, that firm sets the price. 
E)  Price is regulated by the government. 
A)  There is a range of prices at which to sell. 
B)  The market sets the price so there is no price competition. 
C)  There is a price leader in the farming industry that sets the price. 
D)  Since there is only one seller, that firm sets the price. 
E)  Price is regulated by the government.

Question 3

particular type of competition dramatically influences the range of price competition and,in turn,

Accepted Answer

A)  the nature of product differentiation and extent of advertising. 
B)  the nature of product differentiation and extent of on-hand inventory. 
C)  the degree of involvement with each of the organization's stakeholders. 
D)  the degree of involvement with both retailers and wholesalers. 
E)  the relationship between product lines and product classes. 
A)  the nature of product differentiation and extent of advertising. 
B)  the nature of product differentiation and extent of on-hand inventory. 
C)  the degree of involvement with each of the organization's stakeholders. 
D)  the degree of involvement with both retailers and wholesalers. 
E)  the relationship between product lines and product classes.

Question 4

Netflix used to charge $14.99 per month for its movie rental service.However,when Blockbuster introduced the same service at $13.99,Netflix then dropped its price to $13.99.Netflix most likely made this price reduction in an attempt to

Accepted Answer

A)  decrease revenue but increase profit. 
B)  increase profit by decreasing revenue. 
C)  maintain market share. 
D)  decrease market share. 
E)  increase efficiency. 
A)  decrease revenue but increase profit. 
B)  increase profit by decreasing revenue. 
C)  maintain market share. 
D)  decrease market share. 
E)  increase efficiency.

Question 5

Ampro-Mag is a small company that makes materials for safely controlling hazardous spills of all kinds.It sells these items as a neutralizing kit priced at $100 each.The costs of the materials that go into each kit are $25.It costs $5 in labor to assemble a kit.The company has monthly expenses of $1,000 for rent and insurance,$200 for heat and electricity,$300 for advertising in trade journals,and $3,000 for the monthly salary of its owner.Ampro-Mag's average revenue per unit is

Accepted Answer

A)  $30. 
B)  $70. 
C)  $100. 
D)  $130. 
E)  $4,500. 
A)  $30. 
B)  $70. 
C)  $100. 
D)  $130. 
E)  $4,500.

Question 6

Marginal cost is the change in total cost that results from

Accepted Answer

A)  reducing the total number of units produced. 
B)  increasing the number of units produced by 1 percent. 
C)  increasing the number of products in a product line. 
D)  producing and marketing one additional unit of a product. 
E)  the percentage change that results from changing a product feature or service benefit to reduce costs. 
A)  reducing the total number of units produced. 
B)  increasing the number of units produced by 1 percent. 
C)  increasing the number of products in a product line. 
D)  producing and marketing one additional unit of a product. 
E)  the percentage change that results from changing a product feature or service benefit to reduce costs.

Question 7

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

Accepted Answer

A)  raise initial capital. 
B)  identify pricing objectives and constraints. 
C)  scan competitors for prices of similar products or services. 
D)  select the appropriate pricing formula. 
E)  establish the price range. 
A)  raise initial capital. 
B)  identify pricing objectives and constraints. 
C)  scan competitors for prices of similar products or services. 
D)  select the appropriate pricing formula. 
E)  establish the price range.

Question 8

break-even point (BEP)= [Fixed cost ÷ (Unit price − __________)].

Accepted Answer

A)  Total cost 
B)  Total expense 
C)  Marginal revenue 
D)  Unit variable cost 
E)  Total number of units produced or quantity 
A)  Total cost 
B)  Total expense 
C)  Marginal revenue 
D)  Unit variable cost 
E)  Total number of units produced or quantity

Question 9

Which of the following statements about consumer demand as a pricing constraint is most accurate?

Accepted Answer

A)  The number of potential buyers for the product class has little effect on the price a seller can charge. 
B)  The number of potential buyers for the product affects the price a seller can charge, but only if the product is a luxury item. 
C)  The number of potential buyers for the product affects the price a seller can charge, but only if the product is a necessity item. 
D)  The number of potential buyers for the brand affects the price a seller can charge in the growth stage of a product life cycle, but not in the introductory stage. 
E)  Whether the item is a luxury or a necessity affects the price a seller can charge. 
A)  The number of potential buyers for the product class has little effect on the price a seller can charge. 
B)  The number of potential buyers for the product affects the price a seller can charge, but only if the product is a luxury item. 
C)  The number of potential buyers for the product affects the price a seller can charge, but only if the product is a necessity item. 
D)  The number of potential buyers for the brand affects the price a seller can charge in the growth stage of a product life cycle, but not in the introductory stage. 
E)  Whether the item is a luxury or a necessity affects the price a seller can charge.

Question 10

the following competitive markets from LEAST competitive to most competitive.

Accepted Answer

A)  monopolistic competition, pure monopoly, pure competition, and oligopoly. 
B)  pure competition, monopolistic competition, oligopoly, and pure monopoly 
C)  pure competition, monopolistic competition, pure monopoly, and oligopoly 
D)  monopolistic competition, pure monopoly, pure competition, and oligopoly 
E)  pure monopoly, oligopoly, monopolistic competition, and pure competition 
A)  monopolistic competition, pure monopoly, pure competition, and oligopoly. 
B)  pure competition, monopolistic competition, oligopoly, and pure monopoly 
C)  pure competition, monopolistic competition, pure monopoly, and oligopoly 
D)  monopolistic competition, pure monopoly, pure competition, and oligopoly 
E)  pure monopoly, oligopoly, monopolistic competition, and pure competition

Question 11

Figure 13-12
-Figure 13-12 above,"B" identifies

Accepted Answer

A)  fixed costs. 
B)  a break-even point. 
C)  variable costs. 
D)  a profit. 
E)  total revenue. 
A)  fixed costs. 
B)  a break-even point. 
C)  variable costs. 
D)  a profit. 
E)  total revenue.

Question 12

demand curve refers to a graph that relates

Accepted Answer

A)  the quantity sold and price, which shows the maximum number of units that will be sold at a given price. 
B)  the quantity sold and price, which shows the minimum number of units that must be sold to break even. 
C)  the quantity sold and price, which shows the minimum number of units that must be sold in order to make a profit. 
D)  total production costs to various price points in order to determine how many units must be sold in order to realize a predetermined profit. 
E)  primary demand to selective demand. 
A)  the quantity sold and price, which shows the maximum number of units that will be sold at a given price. 
B)  the quantity sold and price, which shows the minimum number of units that must be sold to break even. 
C)  the quantity sold and price, which shows the minimum number of units that must be sold in order to make a profit. 
D)  total production costs to various price points in order to determine how many units must be sold in order to realize a predetermined profit. 
E)  primary demand to selective demand.

Question 13

Figure 13-12
-Figure 13-12 above is drawn to show that variable costs are smaller than fixed costs when the firm sells

Accepted Answer

A)  400 pictures. 
B)  900 pictures. 
C)  1,000 pictures. 
D)  1,200 pictures. 
E)  There is not enough information to determine this. 
A)  400 pictures. 
B)  900 pictures. 
C)  1,000 pictures. 
D)  1,200 pictures. 
E)  There is not enough information to determine this.

Question 14

Products such as disposable diapers usually have

Accepted Answer

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

Question 15

BOGO offer is retail slang that means

Accepted Answer

A)  big orders, greater overhead 
B)  buy one, get one 
C)  build only good offerings 
D)  bad once, good overall 
E)  buy over grand objectives 
A)  big orders, greater overhead 
B)  buy one, get one 
C)  build only good offerings 
D)  bad once, good overall 
E)  buy over grand objectives

Question 16

Managing for long-run profits implies that a company

Accepted Answer

A)  will give up immediate profit in exchange for achieving a higher market share in hopes of penetrating competitive markets. 
B)  will maintain a given price range to ensure there is no loss of customers over time, even if the profit margin declines. 
C)  all profits will be invested in bonds or other certificates of deposit in order to counteract any drastic economic changes in the future. 
D)  all profits will be reinvested into market research or product research rather than returned to shareholders. 
E)  all products, product lines, or divisions that cannot maintain their pricing goals will be dropped. 
A)  will give up immediate profit in exchange for achieving a higher market share in hopes of penetrating competitive markets. 
B)  will maintain a given price range to ensure there is no loss of customers over time, even if the profit margin declines. 
C)  all profits will be invested in bonds or other certificates of deposit in order to counteract any drastic economic changes in the future. 
D)  all profits will be reinvested into market research or product research rather than returned to shareholders. 
E)  all products, product lines, or divisions that cannot maintain their pricing goals will be dropped.

Question 17

There are more than 100 companies that manufacture natural and artificial flavorings used to enhance the taste of food before it is sold to consumers.Many of these manufacturers are regional operations.Many differentiate themselves from the competition in their advertising by specializing in one or two types of foods for which they provide flavorings.Some use their distribution strategies as a means of differentiating themselves from their competition.This industry is most likely an example of

Accepted Answer

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

Question 18

recently graduated business student decided to open a small Internet café serving a variety of unusual nonalcoholic beverages from around the world.He carefully used all the pricing formulas he learned in school and set a goal to break even the first six months and make a moderate profit for the next six months,at which time he would review his pricing strategies.Within a week after opening,every seat was filled and he had to replenish his beverage orders several times.At his six-month review,he was devastated to find that despite huge sales,he had actually lost money.He realized it wasn't his "math" that was wrong; he forgot to include monthly expenses such as toilet paper,paper towels,hand soap,and trash removal fees in his calculations.These costs should have appeared as __________ in his break-even analysis.

Accepted Answer

A)  fixed costs 
B)  marginal costs 
C)  variable costs 
D)  overhead costs 
E)  sunk costs 
A)  fixed costs 
B)  marginal costs 
C)  variable costs 
D)  overhead costs 
E)  sunk costs

Question 19

Forever Quilting is a company that designs and distributes quilting kits.The kits are priced at $120 each.The costs of the materials that go into each kit are $45.It costs $5 in labor to assemble a kit.The company has monthly expenses of $1,000 for rent and insurance,$200 for heat and electricity,$500 for advertising in quilting magazines,and $3,500 for the monthly salary of its owner.Forever Quilting's marginal revenue is

Accepted Answer

A)  $50. 
B)  $70. 
C)  $120. 
D)  $3,500. 
E)  $5,200. 
A)  $50. 
B)  $70. 
C)  $120. 
D)  $3,500. 
E)  $5,200.

Question 20

you wanted to buy a McDonald's Big Mac,small fries,and a small drink separately,it you cost you $6.19.However,if you purchased these three items together as part of the firm's Extra Value Meal package,you would pay only $4.39,savings 80¢.This "Extra Value Meal" price serves as __________ to you and other consumers,who compare the costs and benefits of substitute items to a bundle containing those items.

Accepted Answer

A)  a marginal analysis 
B)  a profit equation 
C)  a reference value 
D)  a break-even analysis 
E)  price elasticity of demand 
A)  a marginal analysis 
B)  a profit equation 
C)  a reference value 
D)  a break-even analysis 
E)  price elasticity of demand

Which of the following statements regarding price changes is most accurate?

Figure 13-4 -Using Figure 13-4 above,how much price competition is likely for bushels of wheat?

particular type of competition dramatically influences the range of price competition and,in turn,

Netflix used to charge $14.99 per month for its movie rental service.However,when Blockbuster introduced the same service at $13.99,Netflix then dropped its price to $13.99.Netflix most likely made this price reduction in an attempt to

Marginal cost is the change in total cost that results from

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

break-even point (BEP)= [Fixed cost ÷ (Unit price − __________)].

Which of the following statements about consumer demand as a pricing constraint is most accurate?

the following competitive markets from LEAST competitive to most competitive.

Figure 13-12 -Figure 13-12 above,"B" identifies

demand curve refers to a graph that relates

Figure 13-12 -Figure 13-12 above is drawn to show that variable costs are smaller than fixed costs when the firm sells

Products such as disposable diapers usually have

BOGO offer is retail slang that means

Managing for long-run profits implies that a company

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

Which of the following statements regarding price changes is most accurate?

Figure 13-4 -Using Figure 13-4 above,how much price competition is likely for bushels of wheat?

particular type of competition dramatically influences the range of price competition and,in turn,

Netflix used to charge $14.99 per month for its movie rental service.However,when Blockbuster introduced the same service at $13.99,Netflix then dropped its price to $13.99.Netflix most likely made this price reduction in an attempt to

Marginal cost is the change in total cost that results from

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

break-even point (BEP)= [Fixed cost ÷ (Unit price − __________)].

Which of the following statements about consumer demand as a pricing constraint is most accurate?

the following competitive markets from LEAST competitive to most competitive.

Figure 13-12 -Figure 13-12 above,"B" identifies

demand curve refers to a graph that relates

Figure 13-12 -Figure 13-12 above is drawn to show that variable costs are smaller than fixed costs when the firm sells

Products such as disposable diapers usually have

BOGO offer is retail slang that means

Managing for long-run profits implies that a company

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