Question 1

List the two primary determinants of price? What other factors can affect price setting?

Accepted Answer

The price established depends primarily

Question 2

Albert has decided that the pricing strategy at his sporting goods store will include advertisements offering discounts on the Petzel Tikka headlamp for hunting,camping,and cave exploring.This pricing strategy clearly involves:

Accepted Answer

A)  demand creation 
B)  managed costs 
C)  value-added benefits 
D)  intangible features 
E)  perceived quality 
A)  demand creation 
B)  managed costs 
C)  value-added benefits 
D)  intangible features 
E)  perceived quality

Question 3

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)  350 
B)  450 
C)  400 
D)  333 
E)  375 
A)  350 
B)  450 
C)  400 
D)  333 
E)  375

Question 4

What happens when demand is elastic?

Accepted Answer

A)  As price goes up,revenue goes down. 
B)  As price goes down,revenue goes down. 
C)  As price goes up,revenue goes up. 
D)  As price goes up,revenue does not change. 
E)  As price goes down,revenue does not change. 
A)  As price goes up,revenue goes down. 
B)  As price goes down,revenue goes down. 
C)  As price goes up,revenue goes up. 
D)  As price goes up,revenue does not change. 
E)  As price goes down,revenue does not change.

Question 5

A firm has maximized its profits when its marginal revenue equals its marginal cost.

Accepted Answer

A) True 
 B)False

Question 6

_____ 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)  Marginal revenue estimates 
B)  Price equilibrium analyses 
C)  Break-even analyses 
D)  Average total cost (AT
C) figures 
E)  Marginal costs of goods sold 
A)  Marginal revenue estimates 
B)  Price equilibrium analyses 
C)  Break-even analyses 
D)  Average total cost (AT
C) figures 
E)  Marginal costs of goods sold

Question 7

When consumers are sensitive to price changes,______ occurs.

Accepted Answer

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

Question 8

Today's firms must develop specific,measurable,and attainable pricing objectives if they hope to survive in highly competitive markets.

Accepted Answer

A) True 
 B)False

Question 9

_____ pay for every activity of the company.

Accepted Answer

A)  Revenues 
B)  Investments 
C)  Retained earnings 
D)  Profits 
E)  Prices 
A)  Revenues 
B)  Investments 
C)  Retained earnings 
D)  Profits 
E)  Prices

Question 10

Many consumers,especially when faced with an uncertain purchase decision,think that a high price:

Accepted Answer

A)  is a signal of quality 
B)  is an indication that consumers are being ripped off 
C)  will always lead to major price discounts to wholesalers and retailers that distribute it 
D)  is a sign of the company's overall market share 
E)  is because the brand was slipping into the decline stage of the product life cycle but has had a sudden resurgence of growth 
A)  is a signal of quality 
B)  is an indication that consumers are being ripped off 
C)  will always lead to major price discounts to wholesalers and retailers that distribute it 
D)  is a sign of the company's overall market share 
E)  is because the brand was slipping into the decline stage of the product life cycle but has had a sudden resurgence of growth

Question 11

Which of the following statements about yield management systems (YMS)is true?

Accepted Answer

A)  The first use of YMS was in the U.S.car industry as it looked for ways to compete with imports. 
B)  YMS eliminate the problem of simultaneous production and consumption from services. 
C)  YMS cannot be used by any other businesses but services. 
D)  YMS are complex pricing systems used to set equilibrium pricing points. 
E)  YMS are mathematically complex systems to make use of underutilized capacity and reduce the cost of perishability. 
A)  The first use of YMS was in the U.S.car industry as it looked for ways to compete with imports. 
B)  YMS eliminate the problem of simultaneous production and consumption from services. 
C)  YMS cannot be used by any other businesses but services. 
D)  YMS are complex pricing systems used to set equilibrium pricing points. 
E)  YMS are mathematically complex systems to make use of underutilized capacity and reduce the cost of perishability.

Question 12

As long as the revenue of the last unit produced and sold is greater than the cost of the last unit produced and sold,a firm should:

Accepted Answer

A)  continue manufacturing 
B)  not use formula pricing 
C)  continue using price equilibrium 
D)  consider using sales maximization pricing 
E)  reach its break-even point very shortly 
A)  continue manufacturing 
B)  not use formula pricing 
C)  continue using price equilibrium 
D)  consider using sales maximization pricing 
E)  reach its break-even point very shortly

Question 13

Money that is left over after paying for company activities is called:

Accepted Answer

A)  return on investment 
B)  a contribution margin 
C)  profit 
D)  net worth 
E)  a current asset 
A)  return on investment 
B)  a contribution margin 
C)  profit 
D)  net worth 
E)  a current asset

Question 14

SCENARIOS
Continental Lite
In the mid-1990s,Continental Airlines chose to compete head-on with Southwest Airlines by launching Continental Lite,an alternative low-fare commercial airline passenger operation.Top executives at Continental had expected its no-frills operation to break even within a year of its inception,but the airline fell short of the goal.A source close to the company explained it by saying,"Its costs were too high,and its revenues were too low." Some observers criticized Continental's marketing efforts.When the no-frills service was first launched,it lacked a distinct name or identity,missing its chance to make a splash.Then Continental tried to sell three "brands" at once--Lite,a new premium service,and its more traditional long-haul domestic flights.As one rival expressed it,"You cannot be all things to all people."
-Refer to the American Girl Doll.The popularity of the American girl dolls is so great that an increase in the price of the basic Kristen doll and books by 5 percent will not significantly affect the demand for the product.The means that the demand for the American Girl doll is:

Accepted Answer

A)  elastic 
B)  derived 
C)  a multiplier 
D)  inelastic 
E)  symmetrical 
A)  elastic 
B)  derived 
C)  a multiplier 
D)  inelastic 
E)  symmetrical

Question 15

A distributor of bakery suppliers sells 5-pound bags of moist apricots and cranberries,sweet dates,bits of pineapple,and candied cherries for $24.95 to be used in fruitcakes.Since the amount of cranberries purchased depends on how many bags of fruit are demanded,the cost of the cranberries is a:

Accepted Answer

A)  variable cost 
B)  marginal contributor 
C)  fixed cost 
D)  variable revenue 
E)  joint cost 
A)  variable cost 
B)  marginal contributor 
C)  fixed cost 
D)  variable revenue 
E)  joint cost

Question 16

A company using market share pricing has a _____ pricing objective.

Accepted Answer

A)  profit-oriented 
B)  sales-oriented 
C)  demand-oriented 
D)  supply-oriented 
E)  status quo 
A)  profit-oriented 
B)  sales-oriented 
C)  demand-oriented 
D)  supply-oriented 
E)  status quo

Question 17

SCENARIOS
Continental Lite
In the mid-1990s,Continental Airlines chose to compete head-on with Southwest Airlines by launching Continental Lite,an alternative low-fare commercial airline passenger operation.Top executives at Continental had expected its no-frills operation to break even within a year of its inception,but the airline fell short of the goal.A source close to the company explained it by saying,"Its costs were too high,and its revenues were too low." Some observers criticized Continental's marketing efforts.When the no-frills service was first launched,it lacked a distinct name or identity,missing its chance to make a splash.Then Continental tried to sell three "brands" at once--Lite,a new premium service,and its more traditional long-haul domestic flights.As one rival expressed it,"You cannot be all things to all people."
-Refer to the American Girl Doll.Which of the following factors is most likely to affect the elasticity of demand for the doll?

Accepted Answer

A)  the absence of substitutes 
B)  the existence of complementary products 
C)  the price relative to purchasing power 
D)  product durability 
E)  a variety of alternative uses for the product 
A)  the absence of substitutes 
B)  the existence of complementary products 
C)  the price relative to purchasing power 
D)  product durability 
E)  a variety of alternative uses for the product

Question 18

When price decreases and total revenue falls,demand is:

Accepted Answer

A)  elastic 
B)  inelastic 
C)  absolute 
D)  unitary 
E)  stable 
A)  elastic 
B)  inelastic 
C)  absolute 
D)  unitary 
E)  stable

Question 19

Which of the following statements about the impact of the Internet on pricing strategy is true?

Accepted Answer

A)  The promise of pricing efficiency on the Internet has been realized. 
B)  Setting prices on the Internet offers retailers few advantages. 
C)  One area where the Internet is having a major impact on pricing is the bargaining power between buyers and sellers. 
D)  Internet marketers have found it relatively easy to charge exactly what the market will bear. 
E)  Extranets are online price-comparison engines. 
A)  The promise of pricing efficiency on the Internet has been realized. 
B)  Setting prices on the Internet offers retailers few advantages. 
C)  One area where the Internet is having a major impact on pricing is the bargaining power between buyers and sellers. 
D)  Internet marketers have found it relatively easy to charge exactly what the market will bear. 
E)  Extranets are online price-comparison engines.

Question 20

Last quarter Abingdon Company sold 1,000 decorative decals for $1 each,Cedar Decaliania sold 200 decorative decals at $4 each,Creative Decals sold 500 decals at $2 each,and Donnelly,Inc.sold 300 decals for $4 apiece.Assuming the four companies are the only firms competing in the decorative decal market,calculate unit and dollar market share for each company for last quarter.For each company,which market share figure might be used in an advertisement for that company?

Accepted Answer

The following calculation table shows th

List the two primary determinants of price? What other factors can affect price setting?

Albert has decided that the pricing strategy at his sporting goods store will include advertisements offering discounts on the Petzel Tikka headlamp for hunting,camping,and cave exploring.This pricing strategy clearly involves:

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?

What happens when demand is elastic?

A firm has maximized its profits when its marginal revenue equals its marginal cost.

_____ 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 consumers are sensitive to price changes,______ occurs.

Today's firms must develop specific,measurable,and attainable pricing objectives if they hope to survive in highly competitive markets.

_____ pay for every activity of the company.

Many consumers,especially when faced with an uncertain purchase decision,think that a high price:

Which of the following statements about yield management systems (YMS)is true?

As long as the revenue of the last unit produced and sold is greater than the cost of the last unit produced and sold,a firm should:

Money that is left over after paying for company activities is called:

A distributor of bakery suppliers sells 5-pound bags of moist apricots and cranberries,sweet dates,bits of pineapple,and candied cherries for $24.95 to be used in fruitcakes.Since the amount of cranberries purchased depends on how many bags of fruit are demanded,the cost of the cranberries is a:

A company using market share pricing has a _____ pricing objective.

When price decreases and total revenue falls,demand is:

Which of the following statements about the impact of the Internet on pricing strategy is true?

An Overview of Marketing

Strategic Planning for Competitive Advantag

Social Responsibility, ethics, and the Marketing Environment

Developing a Global Vision27

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

Internet Marketing

Customer Relationship Management

Filters

Exam 17: Pricing Concepts

List the two primary determinants of price? What other factors can affect price setting?

Albert has decided that the pricing strategy at his sporting goods store will include advertisements offering discounts on the Petzel Tikka headlamp for hunting,camping,and cave exploring.This pricing strategy clearly involves:

What happens when demand is elastic?

A firm has maximized its profits when its marginal revenue equals its marginal cost.

_____ 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 consumers are sensitive to price changes,______ occurs.

Today's firms must develop specific,measurable,and attainable pricing objectives if they hope to survive in highly competitive markets.

_____ pay for every activity of the company.

Many consumers,especially when faced with an uncertain purchase decision,think that a high price:

Which of the following statements about yield management systems (YMS)is true?

As long as the revenue of the last unit produced and sold is greater than the cost of the last unit produced and sold,a firm should:

Money that is left over after paying for company activities is called:

A distributor of bakery suppliers sells 5-pound bags of moist apricots and cranberries,sweet dates,bits of pineapple,and candied cherries for $24.95 to be used in fruitcakes.Since the amount of cranberries purchased depends on how many bags of fruit are demanded,the cost of the cranberries is a:

A company using market share pricing has a _____ pricing objective.

When price decreases and total revenue falls,demand is:

Which of the following statements about the impact of the Internet on pricing strategy is true?

An Overview of Marketing

Strategic Planning for Competitive Advantag

Social Responsibility, ethics, and the Marketing Environment

Developing a Global Vision27

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

Internet Marketing

Customer Relationship Management

Filters