Question 1

A concession in price in business markets to achieve a desired goal is called a(n)

Accepted Answer

A) allowance. 
B) objective-oriented discount. 
C) cash discount. 
D) trade discount. 
E) cumulative discount. 
A) allowance. 
B) objective-oriented discount. 
C) cash discount. 
D) trade discount. 
E) cumulative discount.

Question 2

You are a senior sales and marketing analyst for a major retailing firm in Wyoming. The marketing manager just stopped by your office with a very frustrated look on her face. She tells you that she is confused why every time the company raises the sales price of its products, total revenue for the company declines.Based on this information, which of the following explanations do you give her for why this situation occurs? ​

Accepted Answer

A) The demand for the company's products is inelastic, so total revenue declines when prices are raised. 
B) The demand for the company's products is elastic, so total revenue declines when prices are raised. 
C) The demand for the company's products is elastic, so unit sales increase when prices are raised. 
D) The demand for the company's products is inelastic, so unit sales increase when prices are raised. 
E) The demand for the company's products is elastic, so fixed costs increase when prices are raised. 
A) The demand for the company's products is inelastic, so total revenue declines when prices are raised. 
B) The demand for the company's products is elastic, so total revenue declines when prices are raised. 
C) The demand for the company's products is elastic, so unit sales increase when prices are raised. 
D) The demand for the company's products is inelastic, so unit sales increase when prices are raised. 
E) The demand for the company's products is elastic, so fixed costs increase when prices are raised.

Question 3

Duds and Suds is a bar with a country and western atmosphere. In addition to the bar, Duds and Suds has a gift shop that sells western clothing with its logo. Norman is the owner of the business and has recently enacted temporary price reductions through clearance sales, discounts, and nightly drink specials. What is Norman most likely trying to do?

Accepted Answer

A) raise cash quickly. 
B) decrease costs. 
C) increase profitability. 
D) run off the competition. 
E) create a value image. 
A) raise cash quickly. 
B) decrease costs. 
C) increase profitability. 
D) run off the competition. 
E) create a value image.

Question 4

Suppose that the watchband department of Timex sells completed watchbands to the finished watch department. The finished watch department is charged the price it would have to pay an outside watchband manufacturer less a discount to reflect low sales and transportation costs. This method of pricing is called ____ pricing.

Accepted Answer

A) zone 
B) actual full cost 
C) standard full cost 
D) cost plus investment 
E) market-based cost 
A) zone 
B) actual full cost 
C) standard full cost 
D) cost plus investment 
E) market-based cost

Question 5

Product demand usually becomes more elastic over time because more substitutes are found.

Accepted Answer

A) True 
 B)False

Question 6

Price elasticity of demand measures the sensitivity of demand to changes in price.

Accepted Answer

A) True 
 B)False

Question 7

Demand is best determined by a top management committee.

Accepted Answer

A) True 
 B)False

Question 8

For most products, the quantity demanded goes up as the price goes down.

Accepted Answer

A) True 
 B)False

Question 9

Demand depends only on the price of the product.

Accepted Answer

A) True 
 B)False

Question 10

Nonprice competition can be used to establish brand loyalty.

Accepted Answer

A) True 
 B)False

Question 11

The types of prices that appear most often in ads are ___; while the types of prices that occur least often in ads are ____ prices.

Accepted Answer

A) reference; comparison 
B) discount; cost-plus 
C) bargain; premium 
D) comparison; cost-plus 
E) sale; reference 
A) reference; comparison 
B) discount; cost-plus 
C) bargain; premium 
D) comparison; cost-plus 
E) sale; reference

Question 12

The Highland Racquet Club found that with annual fixed costs of $60,000, its breakeven point is 2,000 members when the membership charge is $60 per person per year. What is the variable cost per person for Highland?

Accepted Answer

A) $45 
B) $50 
C) $30 
D) $25 
E) $40 
A) $45 
B) $50 
C) $30 
D) $25 
E) $40

Question 13

The degree to which the price of a product enhances a customer's satisfaction with the purchase experience and with the product after the purchase is part of their

Accepted Answer

A) response. 
B) reference. 
C) interpretation. 
D) price satisfaction. 
E) price-consciousness. 
A) response. 
B) reference. 
C) interpretation. 
D) price satisfaction. 
E) price-consciousness.

Question 14

A customer looking for the lowest price on a mattress without concern for the quality of the mattress or the status gained by buying and using a certain brand is a price-conscious customer.

Accepted Answer

A) True 
 B)False

Question 15

Monopolies usually keep their prices at a level that generate a reasonable, but not excessive, return primarily because

Accepted Answer

A) they want to avoid new competitors entering their market. 
B) they want to avoid government regulations on their pricing. 
C) they try to satisfy the demands of value-conscious consumers. 
D) firms can increase market share more rapidly this way. 
E) customers will discontinue use of these products if prices rise. 
A) they want to avoid new competitors entering their market. 
B) they want to avoid government regulations on their pricing. 
C) they try to satisfy the demands of value-conscious consumers. 
D) firms can increase market share more rapidly this way. 
E) customers will discontinue use of these products if prices rise.

Question 16

Premium-priced products are usually marketed through

Accepted Answer

A) complex marketing channels. 
B) intensive or selective distribution. 
C) exclusive or intensive distribution. 
D) exclusive distribution only. 
E) selective or exclusive distribution. 
A) complex marketing channels. 
B) intensive or selective distribution. 
C) exclusive or intensive distribution. 
D) exclusive distribution only. 
E) selective or exclusive distribution.

Question 17

The Palasi Candy Company is a small business located in the northeastern United States. The owner of Palasi Candy is calculating the projected costs for the coming year. There is rent for the building, salaries for the retail employees, raw materials of sugar, chocolate, and other ingredients, wrappers for packaging of individual pieces of candy, boxes, and radio advertising. Palasi's ______ are most likely to be the raw materials of sugar, chocolate, and other ingredients, as well as the wrappers.

Accepted Answer

A) sunk costs. 
B) variable costs. 
C) direct costs. 
D) fixed costs. 
E) marginal costs. 
A) sunk costs. 
B) variable costs. 
C) direct costs. 
D) fixed costs. 
E) marginal costs.

Question 18

Marketers have more difficulty adjusting their prices than they do any other marketing mix variable.

Accepted Answer

A) True 
 B)False

Question 19

The oldest form of exchange⎯trading of products⎯is known as

Accepted Answer

A) credit. 
B) buying. 
C) purchasing. 
D) barter. 
E) pricing. 
A) credit. 
B) buying. 
C) purchasing. 
D) barter. 
E) pricing.

Question 20

The purpose of the pricing concept is to quantify and express the value of items in a market exchange.

Accepted Answer

A) True 
 B)False

A concession in price in business markets to achieve a desired goal is called a(n)

Product demand usually becomes more elastic over time because more substitutes are found.

Price elasticity of demand measures the sensitivity of demand to changes in price.

Demand is best determined by a top management committee.

For most products, the quantity demanded goes up as the price goes down.

Demand depends only on the price of the product.

Nonprice competition can be used to establish brand loyalty.

The types of prices that appear most often in ads are _; while the types of prices that occur least often in ads are __ prices.

The Highland Racquet Club found that with annual fixed costs of $60,000, its breakeven point is 2,000 members when the membership charge is $60 per person per year. What is the variable cost per person for Highland?

The degree to which the price of a product enhances a customer's satisfaction with the purchase experience and with the product after the purchase is part of their

A customer looking for the lowest price on a mattress without concern for the quality of the mattress or the status gained by buying and using a certain brand is a price-conscious customer.

Monopolies usually keep their prices at a level that generate a reasonable, but not excessive, return primarily because

Premium-priced products are usually marketed through

Marketers have more difficulty adjusting their prices than they do any other marketing mix variable.

The oldest form of exchange⎯trading of products⎯is known as

The purpose of the pricing concept is to quantify and express the value of items in a market exchange.

An Overview of Strategic Marketing

Planning, Implementing, and Evaluating Marketing Strategies

The Marketing Environment

Social Responsibility and Ethics in Marketing

Marketing Research and Information Systems

Target Markets Segmentation and Evaluation

Consumer Buying Behavior

Business Markets and Buying Behavior

Reaching Global Markets

Digital Marketing and Social Networking

Product Concepts, Branding and Packaging

Developing and Managing Products

Services Marketing

Marketing Channels and Supply-Chain Management

Retailing, Direct Marketing and Wholesaling

Integrated Marketing Communications

Advertising and Public Relations

Personal Selling and Sales Promotion

Setting Prices

Filters

Exam 19: Pricing Concepts

A concession in price in business markets to achieve a desired goal is called a(n)

Product demand usually becomes more elastic over time because more substitutes are found.

Price elasticity of demand measures the sensitivity of demand to changes in price.

Demand is best determined by a top management committee.

For most products, the quantity demanded goes up as the price goes down.

Demand depends only on the price of the product.

Nonprice competition can be used to establish brand loyalty.

The types of prices that appear most often in ads are ___; while the types of prices that occur least often in ads are ____ prices.

The Highland Racquet Club found that with annual fixed costs of $60,000, its breakeven point is 2,000 members when the membership charge is $60 per person per year. What is the variable cost per person for Highland?

The degree to which the price of a product enhances a customer's satisfaction with the purchase experience and with the product after the purchase is part of their

A customer looking for the lowest price on a mattress without concern for the quality of the mattress or the status gained by buying and using a certain brand is a price-conscious customer.

Monopolies usually keep their prices at a level that generate a reasonable, but not excessive, return primarily because

Premium-priced products are usually marketed through

Marketers have more difficulty adjusting their prices than they do any other marketing mix variable.

The oldest form of exchange⎯trading of products⎯is known as

The purpose of the pricing concept is to quantify and express the value of items in a market exchange.

An Overview of Strategic Marketing

Planning, Implementing, and Evaluating Marketing Strategies

The Marketing Environment

Social Responsibility and Ethics in Marketing

Marketing Research and Information Systems

Target Markets Segmentation and Evaluation

Consumer Buying Behavior

Business Markets and Buying Behavior

Reaching Global Markets

Digital Marketing and Social Networking

Product Concepts, Branding and Packaging

Developing and Managing Products

Services Marketing

Marketing Channels and Supply-Chain Management

Retailing, Direct Marketing and Wholesaling

Integrated Marketing Communications

Advertising and Public Relations

Personal Selling and Sales Promotion

Setting Prices

Filters

The types of prices that appear most often in ads are _; while the types of prices that occur least often in ads are __ prices.