Question 1

The advertisements for Joy brand perfume claim that it is the most expensive perfume in the world.This is an example of which type of pricing?

Accepted Answer

A)  market share 
B)  target return 
C)  prestige 
D)  profit maximization 
A)  market share 
B)  target return 
C)  prestige 
D)  profit maximization C

Question 2

What is price?

Accepted Answer

Price is the perceived value of a good or service.Perceived value is usually expressed in monetary terms,so price is typically the money exchanged for the good or service.However,price can be anything with perceived value,such as another good or service.A transaction can take place by trading goods and services (barter)rather than exchanging a good or service for dollars.

Question 3

What is the term for the quantity of a product that will be offered to the market by suppliers at various prices for a specified period?

Accepted Answer

A)  supply 
B)  equity 
C)  demand 
D)  inventory 
A)  supply 
B)  equity 
C)  demand 
D)  inventory A

Question 4

When does profit maximization occur?

Accepted Answer

A)  when marginal variable costs equal average revenues 
B)  when marginal revenue equals marginal cost 
C)  when total costs equals average fixed revenue 
D)  when total costs equal total variable costs 
A)  when marginal variable costs equal average revenues 
B)  when marginal revenue equals marginal cost 
C)  when total costs equals average fixed revenue 
D)  when total costs equal total variable costs

Question 5

Adequate distribution for a new product is often obtained by reducing the size of the profit margin for its resellers.

Accepted Answer

A) True 
 B)False

Question 6

Chulo Ibsen makes and sells hand-forged wrought iron fireplace screens for $125 each.He has determined that his fixed costs are $8,000,and his variable costs per firescreen are $45.
-Refer to Fireplace Screens.What is Ibsen's fixed cost contribution per screen?

Accepted Answer

A)  $88.89 
B)  $45 
C)  $80 
D)  $125 
A)  $88.89 
B)  $45 
C)  $80 
D)  $125

Question 7

Which of the following use complex mathematical software to profitably fill unused capacity?

Accepted Answer

A)  yield management systems 
B)  service management systems 
C)  capacity correlation systems 
D)  capacity management software 
A)  yield management systems 
B)  service management systems 
C)  capacity correlation systems 
D)  capacity management software

Question 8

Which of the following determine what sales volume must be reached for a product before the company's total costs equal total revenue and no profits are earned?

Accepted Answer

A)  price equilibrium analyses 
B)  break-even analyses 
C)  marginal revenue estimates 
D)  marginal costs of goods sold 
A)  price equilibrium analyses 
B)  break-even analyses 
C)  marginal revenue estimates 
D)  marginal costs of goods sold

Question 9

When Laser Technology developed and introduced a high-tech crash investigation system to be used by law enforcement officers,the company determined that demand for the product was inelastic,and there was no existing competition.What should be the pricing strategy for the system?

Accepted Answer

A)  low initial price,rising constantly through growth and into maturity 
B)  high initial price,falling slightly when entering the growth stage 
C)  high price,continuing through growth and maturity 
D)  low initial price,rising slightly when entering the growth stage 
A)  low initial price,rising constantly through growth and into maturity 
B)  high initial price,falling slightly when entering the growth stage 
C)  high price,continuing through growth and maturity 
D)  low initial price,rising slightly when entering the growth stage

Question 10

The Canadian Girl catalogue began as a concept to introduce today's girls to girls who lived in the past.Each historically accurate doll is carefully crafted and dressed and has books to describe her life.For example,Kristen is an 1854 pioneer girl who is growing up in Manitoba.Her story begins with her long sea voyage from Iceland.The basic doll dressed in a calico dress and striped apron plus the hardcover story of how she got to Manitoba costs $90.Six more hardback books of Kristen's life are available for $74.95.Kristen's nightgown costs $20,and a matching one for the doll owner is an additional $38.Buy both together and the price is only $50.A hand-painted wooden bed and trunk for Kristen are available for $213.Shipping costs vary with the price of the merchandise ordered.
-Refer to Canadian Girl Doll.In terms of the costs of producing the dolls and its accessories,the salary of the graphic designer who does the layout for the Canadian Girl catalogue is which of the following?

Accepted Answer

A)  a variable cost 
B)  a fixed cost 
C)  a markup cost 
D)  an elastic cost 
A)  a variable cost 
B)  a fixed cost 
C)  a markup cost 
D)  an elastic cost

Question 11

Ceylon Express sells bottled pasteurized tea to retailers.It has the following revenues and costs:
$\begin{array}{llcc}
  \text { Sales price per bottle: } &\$0.50  \
 \text { Variable costs per bottle: } &\$0.30\
 \text { Total fixed costs (annual): } &\$50,000\
 \text {Tax rate:  } &20 \text { percent }\\

\end{array}$

What is the annual break-even point in unit for the company?

Accepted Answer

A)  100,000 
B)  50,000 
C)  250,000 
D)  166,667 
A)  100,000 
B)  50,000 
C)  250,000 
D)  166,667

Question 12

In a sluggish economy,consumers will buy even the most modest of products with the same discretion once shown only to big-ticket items,such as computers,air fares,and designer clothes.The result is a growing popularity of cheaper private-label products,and the likelihood that price wars among consumer goods could lead to the same kind of consolidation that occurred in the airline and electronics industries.Moreover,analysts say changing buying habits will force premium brand marketers to lower their prices to protect their positions.These companies may also upgrade products to distinguish them from private labels and promote their brands more aggressively than ever.
One analyst says that consumers are forcing product innovation.Products have to be sold on merit.As a result,there will be fewer brands of significance,but the significant brands will be stronger.Brand loyalty is believed to exist only when,or if,value is provided.How do the significant brands compete? One analyst says that a combination of sensible pricing and innovation with a strong brand name can stabilize market share.Reformulated or repackaged products are typical examples of innovative attempts to solidify market share.
-Refer to Consumer Buying Habits.To compete against the private labels,the significant brands can upgrade products to distinguish them from private labels and advertise their brands more aggressively than ever.Most of the ads will feature cents-off coupons.This pricing strategy clearly involves manipulation of which of the following?

Accepted Answer

A)  distribution strategy 
B)  promotion strategy 
C)  product mix strategy 
D)  credence qualities 
A)  distribution strategy 
B)  promotion strategy 
C)  product mix strategy 
D)  credence qualities

Question 13

The price of the good or service is a key decision for a marketer because it most significantly and directly affects which of the following?

Accepted Answer

A)  the product's promotion 
B)  the product's distribution 
C)  the product's demand 
D)  the product's quality 
A)  the product's promotion 
B)  the product's distribution 
C)  the product's demand 
D)  the product's quality

Question 14

Status quo pricing objectives indicate that prices are adjusted to meet the competition.

Accepted Answer

A) True 
 B)False

Question 15

Entertainment Central makes video game consoles,which it sells for $500.It estimates its variable costs to be $200 per console.It figures its fixed costs to be $600,000 per year.How many consoles does it have to sell to break even?

Accepted Answer

A)  2,000 
B)  2,500 
C)  3,000 
D)  1,200 
A)  2,000 
B)  2,500 
C)  3,000 
D)  1,200

Question 16

What occurs when an increase in sales exactly offsets a decrease in price so that total revenue remains exactly the same?

Accepted Answer

A)  highly elastic demand 
B)  fixed elasticity 
C)  inelastic demand 
D)  unitary elasticity 
A)  highly elastic demand 
B)  fixed elasticity 
C)  inelastic demand 
D)  unitary elasticity

Question 17

Under which of the following conditions will companies with low market share be most likely to fail?

Accepted Answer

A)  competing in an industry requiring market power and economies of scale 
B)  competing in a slow-growth industry 
C)  competing in an industry with few product changes 
D)  competing in an industry that makes frequently purchased items 
A)  competing in an industry requiring market power and economies of scale 
B)  competing in a slow-growth industry 
C)  competing in an industry with few product changes 
D)  competing in an industry that makes frequently purchased items

Question 18

Which of the following statements describes an advantage of status quo pricing?

Accepted Answer

A)  Status quo pricing causes price wars. 
B)  Status quo pricing requires little planning. 
C)  Status quo pricing is derived from actual costs of manufacturing. 
D)  Status quo pricing maintains the organization's differential advantage. 
A)  Status quo pricing causes price wars. 
B)  Status quo pricing requires little planning. 
C)  Status quo pricing is derived from actual costs of manufacturing. 
D)  Status quo pricing maintains the organization's differential advantage.

Question 19

What is the practice of marking up prices by 100 percent (or doubling the cost to set the selling price)?

Accepted Answer

A)  symmetrical pricing 
B)  mark-on adding 
C)  margin pricing 
D)  keystoning 
A)  symmetrical pricing 
B)  mark-on adding 
C)  margin pricing 
D)  keystoning

Question 20

Autumn Fair sells reusable plastic stencils for use in decorating.When graphed,the demand schedule for Autumn Fair brand stencils forms a straight line.If at $3 per stencil,500 stencils are demanded,and at $4 per stencil,450 stencils are ordered,how many will be ordered at a price of $6 per stencil?

Accepted Answer

A)  333 
B)  350 
C)  400 
D)  375 
A)  333 
B)  350 
C)  400 
D)  375

The advertisements for Joy brand perfume claim that it is the most expensive perfume in the world.This is an example of which type of pricing?

What is price?

What is the term for the quantity of a product that will be offered to the market by suppliers at various prices for a specified period?

When does profit maximization occur?

Adequate distribution for a new product is often obtained by reducing the size of the profit margin for its resellers.

Chulo Ibsen makes and sells hand-forged wrought iron fireplace screens for $125 each.He has determined that his fixed costs are $8,000,and his variable costs per firescreen are $45. -Refer to Fireplace Screens.What is Ibsen's fixed cost contribution per screen?

Which of the following use complex mathematical software to profitably fill unused capacity?

Which of the following determine what sales volume must be reached for a product before the company's total costs equal total revenue and no profits are earned?

When Laser Technology developed and introduced a high-tech crash investigation system to be used by law enforcement officers,the company determined that demand for the product was inelastic,and there was no existing competition.What should be the pricing strategy for the system?

Ceylon Express sells bottled pasteurized tea to retailers.It has the following revenues and costs: Sales price per bottle: \0 .50 Variable costs per bottle: \0 .30 Total fixed costs (annual): \5 0,000 Tax rate: 20 percent \ What is the annual break-even point in unit for the company?

The price of the good or service is a key decision for a marketer because it most significantly and directly affects which of the following?

Status quo pricing objectives indicate that prices are adjusted to meet the competition.

Entertainment Central makes video game consoles,which it sells for $500.It estimates its variable costs to be $200 per console.It figures its fixed costs to be $600,000 per year.How many consoles does it have to sell to break even?

What occurs when an increase in sales exactly offsets a decrease in price so that total revenue remains exactly the same?

Under which of the following conditions will companies with low market share be most likely to fail?

Which of the following statements describes an advantage of status quo pricing?

What is the practice of marking up prices by 100 percent (or doubling the cost to set the selling price)?

Autumn Fair sells reusable plastic stencils for use in decorating.When graphed,the demand schedule for Autumn Fair brand stencils forms a straight line.If at $3 per stencil,500 stencils are demanded,and at $4 per stencil,450 stencils are ordered,how many will be ordered at a price of $6 per stencil?

An Overview of Marketing

Strategic Planning for Competitive Advantage

Ethics and the Marketing Environment

Consumer Decision Making

Business Marketing

Segmenting and Targeting Markets

Decision Support Systems and Marketing Research

Product Concepts

Developing and Managing Products

Services and Nonprofit Organization Marketing

Marketing Channels and Supply Chain Management

Retailing

Integrated Marketing Communications

Advertising and Public Relations

Sales Promotion and Personal Selling

Setting the Right Price

Customer Relationship Management CRM

Marketing on the Web

Filters

Exam 16: Pricing Concepts

The advertisements for Joy brand perfume claim that it is the most expensive perfume in the world.This is an example of which type of pricing?

What is price?

What is the term for the quantity of a product that will be offered to the market by suppliers at various prices for a specified period?

When does profit maximization occur?

Adequate distribution for a new product is often obtained by reducing the size of the profit margin for its resellers.

Chulo Ibsen makes and sells hand-forged wrought iron fireplace screens for $125 each.He has determined that his fixed costs are $8,000,and his variable costs per firescreen are $45. -Refer to Fireplace Screens.What is Ibsen's fixed cost contribution per screen?

Which of the following use complex mathematical software to profitably fill unused capacity?

Which of the following determine what sales volume must be reached for a product before the company's total costs equal total revenue and no profits are earned?

When Laser Technology developed and introduced a high-tech crash investigation system to be used by law enforcement officers,the company determined that demand for the product was inelastic,and there was no existing competition.What should be the pricing strategy for the system?

Ceylon Express sells bottled pasteurized tea to retailers.It has the following revenues and costs: Sales price per bottle: \0 .50 Variable costs per bottle: \0 .30 Total fixed costs (annual): \5 0,000 Tax rate: 20 percent \ What is the annual break-even point in unit for the company?

The price of the good or service is a key decision for a marketer because it most significantly and directly affects which of the following?

Status quo pricing objectives indicate that prices are adjusted to meet the competition.

Entertainment Central makes video game consoles,which it sells for $500.It estimates its variable costs to be $200 per console.It figures its fixed costs to be $600,000 per year.How many consoles does it have to sell to break even?

What occurs when an increase in sales exactly offsets a decrease in price so that total revenue remains exactly the same?

Under which of the following conditions will companies with low market share be most likely to fail?

Which of the following statements describes an advantage of status quo pricing?

What is the practice of marking up prices by 100 percent (or doubling the cost to set the selling price)?

An Overview of Marketing

Strategic Planning for Competitive Advantage

Ethics and the Marketing Environment

Consumer Decision Making

Business Marketing

Segmenting and Targeting Markets

Decision Support Systems and Marketing Research

Product Concepts

Developing and Managing Products

Services and Nonprofit Organization Marketing

Marketing Channels and Supply Chain Management

Retailing

Integrated Marketing Communications

Advertising and Public Relations

Sales Promotion and Personal Selling

Setting the Right Price

Customer Relationship Management CRM

Marketing on the Web

Filters