Question 1

Traditional economic theory considers both costs and demand in determining an equilibrium price.

Accepted Answer

A) True 
 B)False

Question 2

You are used to working with the usual pricing objectives for domestic health insurance organizations.Finding that work no longer challenging after ten years,you have moved to the marketing department of the international headquarters of a travelers' health insurer. ​
​Which new objective joins the traditional objectives for your new job to set prices in global marketing?

Accepted Answer

A) ​profitability of the premiums charged to customers 
B) ​volume of customers who purchase travelers' health insurance 
C) ​price stability worldwide for every traveler 
D) ​meeting competition from other travelers' health insurers 
E) ​prestige of offering the best coverage with the access to the best healthcare options 
A) ​profitability of the premiums charged to customers 
B) ​volume of customers who purchase travelers' health insurance 
C) ​price stability worldwide for every traveler 
D) ​meeting competition from other travelers' health insurers 
E) ​prestige of offering the best coverage with the access to the best healthcare options

Question 3

Full-cost pricing allocates fixed costs that can be directly attributed to the production of the specific priced item.

Accepted Answer

A) True 
 B)False

Question 4

You are a staunch environmentalist.When hybrid vehicles were introduced,the supply was very limited.Buyers were paying a premium over the listed manufacturer's suggested retail price (MSRP).At that time,your budget could not stretch that far,but you still wanted to own a car that does not depend on petroleum products.By waiting,you find that the automobile dealers have announced that their shipments of new hybrid cars have increased by 10 percent.Meanwhile,the average price of regular gasoline rose from $3.30 to $3.63 per gallon. ​
​Required:
If the price elasticity of demand for new hybrid cars is 1.25 and for gasoline is 1.0,what was the effect on the prices of a new hybrid car and on gasoline?

Accepted Answer

A) ​The price of the hybrid car fell by 2.5 percent and the price of gasoline increased by 1.1 percent. 
B) ​The price of the hybrid car rose by 12.5 percent and the price of gasoline increased by 11.1 percent. 
C) ​The price of the hybrid car fell by 10 percent as did the price of gasoline. 
D) ​The price of the hybrid car rose by 8 percent, and the price of gasoline increased by 10 percent. 
E) ​The price of the hybrid car fell by 8 percent, and the price of gasoline increased by 10 percent. 
A) ​The price of the hybrid car fell by 2.5 percent and the price of gasoline increased by 1.1 percent. 
B) ​The price of the hybrid car rose by 12.5 percent and the price of gasoline increased by 11.1 percent. 
C) ​The price of the hybrid car fell by 10 percent as did the price of gasoline. 
D) ​The price of the hybrid car rose by 8 percent, and the price of gasoline increased by 10 percent. 
E) ​The price of the hybrid car fell by 8 percent, and the price of gasoline increased by 10 percent.

Question 5

Marginal revenue is the change in total revenue that results from selling an additional unit of output.

Accepted Answer

A) True 
 B)False

Question 6

Match each item with the correct statement below.
-A pricing technique that is used to determine the number of products that must be sold at a specified price to generate enough revenue to cover total cost is known as _____.

Accepted Answer

A) breakeven analysis 
B) tariffs 
C) unfair-trade laws 
D) incremental-cost pricing 
E) profit maximization
F)demand
G)value pricing
H)monopoly
I)elasticity
J)marginal
K)fair-trade laws
L)yield management
M)oligopoly
N)cost-plus pricing
O)full-cost pricing
P)supply
Q)marginal analysis
R)target-return objectives
S)market-share objectives
T)pure competition 
A) breakeven analysis 
B) tariffs 
C) unfair-trade laws 
D) incremental-cost pricing 
E) profit maximization
F)demand
G)value pricing
H)monopoly
I)elasticity
J)marginal
K)fair-trade laws
L)yield management
M)oligopoly
N)cost-plus pricing
O)full-cost pricing
P)supply
Q)marginal analysis
R)target-return objectives
S)market-share objectives
T)pure competition

Question 7

Sunshine Cereals has been in the market for seven decades.They attribute their success to maintaining an almost stable product price in the face of inflation as well as stiff competition from rival firms.The management at Sunshine Cereals knows that any substantial increase in product price would translate into loss of sales as consumers are used to paying a specific price for their cereals.This specific price is an example of (a):

Accepted Answer

A) customary price. 
B) value price. 
C) full-cost price. 
D) incremental-cost price. 
A) customary price. 
B) value price. 
C) full-cost price. 
D) incremental-cost price.

Question 8

Which of the following exempted interstate fair-trade contracts from compliance with antitrust requirements,thus freeing states to keep these laws on their books if they so desired?

Accepted Answer

A) The Clayton Act of 1914 
B) The Robinson-Patman Act of 1936 
C) The Miller-Tydings Resale Price Maintenance Act of 1937 
D) The Consumer Goods Pricing Act of 1975 
A) The Clayton Act of 1914 
B) The Robinson-Patman Act of 1936 
C) The Miller-Tydings Resale Price Maintenance Act of 1937 
D) The Consumer Goods Pricing Act of 1975

Question 9

A five-pound bag of roasted peanuts sells for $8,and the average variable cost is $4 per bag.If the total fixed cost for the roasted peanuts is $80,000,the breakeven point in bags is:

Accepted Answer

A) 20,000 
B) 40,000 
C) 80,000 
D) 120,000 
A) 20,000 
B) 40,000 
C) 80,000 
D) 120,000

Question 10

The price elasticity of demand (or elasticity of demand)is the percentage change in the quantity of a good or service demanded divided by the percentage change in its price.

Accepted Answer

A) True 
 B)False

Question 11

The ticket reselling market is both highly fragmented and susceptible to fraud and distorted pricing.

Accepted Answer

A) True 
 B)False

Question 12

Describe the significance of yield management.

Accepted Answer

When most of a firm's costs are fixed ov

Question 13

The PIMS project discovered a strong negative relationship between a firm's product quality and its return on investment.

Accepted Answer

A) True 
 B)False

Question 14

When discounts become normal elements of a competitive marketplace,other marketing mix elements gain importance in purchase decisions.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is true of fair-trade laws?

Accepted Answer

A) They allow manufacturers to stipulate minimum retail prices for their products. 
B) They allow retailers to offer discount schemes on specified products. 
C) They require sellers to maintain maximum prices for comparable merchandise. 
D) They assert that a product's image is a property right of the retailer. 
A) They allow manufacturers to stipulate minimum retail prices for their products. 
B) They allow retailers to offer discount schemes on specified products. 
C) They require sellers to maintain maximum prices for comparable merchandise. 
D) They assert that a product's image is a property right of the retailer.

Question 16

A product is priced to sell for $12 with average variable costs of $8.The company expects to earn a profit of $400,000 with its total fixed costs of $120,000.The minimum number of units that must be sold in order to reach this target return is:

Accepted Answer

A) 400,000 
B) 130,000 
C) 120,000 
D) 80,000 
A) 400,000 
B) 130,000 
C) 120,000 
D) 80,000

Question 17

​You are the head of pricing strategy for your firm.You are very excited about a new point-of-sale system that has just been installed in all your firm's retail outlets.The system is a state-of-the-art real-time information system that captures the details of every sale made in your retail outlets.You have up-to-the-minute data-on-demand elements for your entire product line. ​
Required:
In using your new data-on-demand elements to make pricing decisions,how would you handle the limitations of this approach?

Accepted Answer

A) ​Post charts of predicted future buying trends in the sales department as motivational incentives. 
B) ​Tell decision-making executives that you cannot produce an accurate estimation of current trends. 
C) ​Be prepared for unpredictable changes in demand because actual purchase data do not allow estimation of future trends. 
D) ​Change the way that the firm's accounts receivable employees record information. 
E) ​Change the way that the firm's accounts payable employees record information. 
A) ​Post charts of predicted future buying trends in the sales department as motivational incentives. 
B) ​Tell decision-making executives that you cannot produce an accurate estimation of current trends. 
C) ​Be prepared for unpredictable changes in demand because actual purchase data do not allow estimation of future trends. 
D) ​Change the way that the firm's accounts receivable employees record information. 
E) ​Change the way that the firm's accounts payable employees record information.

Question 18

Match each item with the correct statement below.
-A pricing method,that uses all relevant variable costs in setting a product's price and allocates those fixed costs that cannot be directly attributed to the production of the priced item,is known as _____.

Accepted Answer

A) breakeven analysis 
B) tariffs 
C) unfair-trade laws 
D) incremental-cost pricing 
E) profit maximization
F)demand
G)value pricing
H)monopoly
I)elasticity
J)marginal
K)fair-trade laws
L)yield management
M)oligopoly
N)cost-plus pricing
O)full-cost pricing
P)supply
Q)marginal analysis
R)target-return objectives
S)market-share objectives
T)pure competition 
A) breakeven analysis 
B) tariffs 
C) unfair-trade laws 
D) incremental-cost pricing 
E) profit maximization
F)demand
G)value pricing
H)monopoly
I)elasticity
J)marginal
K)fair-trade laws
L)yield management
M)oligopoly
N)cost-plus pricing
O)full-cost pricing
P)supply
Q)marginal analysis
R)target-return objectives
S)market-share objectives
T)pure competition

Question 19

A company incurs fixed costs of $35,000 and average variable costs of $7 per item.This company sells 10,000 units and just breaks even.The unit selling price for the product is:

Accepted Answer

A) $10.00 
B) $7.35 
C) $17.00 
D) $10.50 
A) $10.00 
B) $7.35 
C) $17.00 
D) $10.50

Question 20

In international marketing,which of the following pricing objectives is used when products are associated with intangible benefits,such as high quality,exclusiveness,or attractive design?

Accepted Answer

A) Profitability objective 
B) Volume objective 
C) Meeting-competition objective 
D) Prestige objective 
A) Profitability objective 
B) Volume objective 
C) Meeting-competition objective 
D) Prestige objective

Traditional economic theory considers both costs and demand in determining an equilibrium price.

Full-cost pricing allocates fixed costs that can be directly attributed to the production of the specific priced item.

Marginal revenue is the change in total revenue that results from selling an additional unit of output.

Match each item with the correct statement below. -A pricing technique that is used to determine the number of products that must be sold at a specified price to generate enough revenue to cover total cost is known as _____.

Which of the following exempted interstate fair-trade contracts from compliance with antitrust requirements,thus freeing states to keep these laws on their books if they so desired?

A five-pound bag of roasted peanuts sells for $8,and the average variable cost is $4 per bag.If the total fixed cost for the roasted peanuts is $80,000,the breakeven point in bags is:

The price elasticity of demand (or elasticity of demand)is the percentage change in the quantity of a good or service demanded divided by the percentage change in its price.

The ticket reselling market is both highly fragmented and susceptible to fraud and distorted pricing.

Describe the significance of yield management.

The PIMS project discovered a strong negative relationship between a firm's product quality and its return on investment.

When discounts become normal elements of a competitive marketplace,other marketing mix elements gain importance in purchase decisions.

Which of the following is true of fair-trade laws?

A product is priced to sell for $12 with average variable costs of $8.The company expects to earn a profit of $400,000 with its total fixed costs of $120,000.The minimum number of units that must be sold in order to reach this target return is:

Match each item with the correct statement below. -A pricing method,that uses all relevant variable costs in setting a product's price and allocates those fixed costs that cannot be directly attributed to the production of the priced item,is known as _____.

A company incurs fixed costs of $35,000 and average variable costs of $7 per item.This company sells 10,000 units and just breaks even.The unit selling price for the product is:

In international marketing,which of the following pricing objectives is used when products are associated with intangible benefits,such as high quality,exclusiveness,or attractive design?

Marketing: the Art and Science of Satisfying Customers

Strategic Planning in Contemporary Marketing

The Marketing Environment, ethics, and Social Responsibility

Social Media: Living in the Connected World

E-Business: Managing the Customer Experience

Consumer Behavior

Business-To-Business B2bmarketing

Global Marketing

Market Segmentation, targeting, and Positioning

Marketing Research in the Era of Big Data

Relationship Marketing and Customer Relationship Management Crm

Product and Service Strategies

Developing and Managing Brand and Product Categories

Marketing Channels and Supply Chain Management

Retailers, wholesalers, and Direct Marketers

Integrated Marketing Communications, advertising, and Public Relations

Personal Selling and Sales Promotion

Pricing Strategies

Developing an Effective Marketing Plan

Financial Analysis in Marketing

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Exam 18: Pricing Concepts

Traditional economic theory considers both costs and demand in determining an equilibrium price.

Full-cost pricing allocates fixed costs that can be directly attributed to the production of the specific priced item.

Marginal revenue is the change in total revenue that results from selling an additional unit of output.

Match each item with the correct statement below. -A pricing technique that is used to determine the number of products that must be sold at a specified price to generate enough revenue to cover total cost is known as _____.

Which of the following exempted interstate fair-trade contracts from compliance with antitrust requirements,thus freeing states to keep these laws on their books if they so desired?

A five-pound bag of roasted peanuts sells for $8,and the average variable cost is $4 per bag.If the total fixed cost for the roasted peanuts is $80,000,the breakeven point in bags is:

The price elasticity of demand (or elasticity of demand)is the percentage change in the quantity of a good or service demanded divided by the percentage change in its price.

The ticket reselling market is both highly fragmented and susceptible to fraud and distorted pricing.

Describe the significance of yield management.

The PIMS project discovered a strong negative relationship between a firm's product quality and its return on investment.

When discounts become normal elements of a competitive marketplace,other marketing mix elements gain importance in purchase decisions.

Which of the following is true of fair-trade laws?

A product is priced to sell for $12 with average variable costs of $8.The company expects to earn a profit of $400,000 with its total fixed costs of $120,000.The minimum number of units that must be sold in order to reach this target return is:

Match each item with the correct statement below. -A pricing method,that uses all relevant variable costs in setting a product's price and allocates those fixed costs that cannot be directly attributed to the production of the priced item,is known as _____.

A company incurs fixed costs of $35,000 and average variable costs of $7 per item.This company sells 10,000 units and just breaks even.The unit selling price for the product is:

In international marketing,which of the following pricing objectives is used when products are associated with intangible benefits,such as high quality,exclusiveness,or attractive design?

Marketing: the Art and Science of Satisfying Customers

Strategic Planning in Contemporary Marketing

The Marketing Environment, ethics, and Social Responsibility

Social Media: Living in the Connected World

E-Business: Managing the Customer Experience

Consumer Behavior

Business-To-Business B2bmarketing

Global Marketing

Market Segmentation, targeting, and Positioning

Marketing Research in the Era of Big Data

Relationship Marketing and Customer Relationship Management Crm

Product and Service Strategies

Developing and Managing Brand and Product Categories

Marketing Channels and Supply Chain Management

Retailers, wholesalers, and Direct Marketers

Integrated Marketing Communications, advertising, and Public Relations

Personal Selling and Sales Promotion

Pricing Strategies

Developing an Effective Marketing Plan

Financial Analysis in Marketing

Filters