Question 1

A firm's profit equation equals

Accepted Answer

A) Total cost + Total revenue or [(Fixed cost + Variable cost)+ (Unit price × Quantity sold)]. 
B) Total revenue − Total cost or [(Unit price × Quantity sold)− (Fixed cost + Variable cost)]. 
C) Total cost − Marginal cost or [(Fixed cost + Variable cost)− (Unit price × Quantity sold)]. 
D) Total cost − Variable cost or [(Fixed cost + Variable cost)− (Unit price × Quantity sold)]. 
E) Total revenue / Total cost or [(Unit price × Quantity sold)÷ (Fixed cost + Variable cost)]. 
A) Total cost + Total revenue or [(Fixed cost + Variable cost)+ (Unit price × Quantity sold)]. 
B) Total revenue − Total cost or [(Unit price × Quantity sold)− (Fixed cost + Variable cost)]. 
C) Total cost − Marginal cost or [(Fixed cost + Variable cost)− (Unit price × Quantity sold)]. 
D) Total cost − Variable cost or [(Fixed cost + Variable cost)− (Unit price × Quantity sold)]. 
E) Total revenue / Total cost or [(Unit price × Quantity sold)÷ (Fixed cost + Variable cost)].

Question 2

Suppose you want to get "plugged in" and buy an all-electric Tesla Model S (see the photo above),the world's leading all-electric,zero-emission car that has a 265-mile range and can be recharged in three hours.The Tesla Model S Performance model has a list price of $87,500.However,you want several options (Performance Plus Package,red multi-coat armor paint,Tech package,Sound Studio Package,home charging station,performance wheels,and others)that will cost $17,500.An extended warranty will add an additional $5,000.However,if you put $50,000 down now and finance the balance over the next year,you will receive a dealer rebate of $5,000 off the list price.The dealer will give you a $7,000 trade-in allowance for your 2008 Honda Civic DX four-door sedan.In addition,you will have to pay a state sales tax of $10,000,an auto registration fee of $1,000 to the state,and a $1,000 destination charge to ship and prep the car.But because the Tesla Model S is an alternative energy vehicle,you qualify for a $2,500 state rebate and a $7,500 federal tax credit! Finally,your total finance charge is $7,000.Applying the price equation,what is your final price for the Tesla Model S?

Accepted Answer

A) $57,000 
B) $68,000 
C) $87,500 
D) $107,000 
E) $151,000 
A) $57,000 
B) $68,000 
C) $87,500 
D) $107,000 
E) $151,000

Question 3

In Figure 13-5B above,the demand curve shifts from D2 to D3.This most likely represents

Accepted Answer

A) an increase in demand that did not require a change in price but was the result in a change in one or more demand factors. 
B) an increase in demand that required a decrease in price. 
C) no change in price and no change in demand. 
D) no change in demand or price but a greater profit due to economies of scale. 
E) an decrease in price from $8 to $6 per unit. 
A) an increase in demand that did not require a change in price but was the result in a change in one or more demand factors. 
B) an increase in demand that required a decrease in price. 
C) no change in price and no change in demand. 
D) no change in demand or price but a greater profit due to economies of scale. 
E) an decrease in price from $8 to $6 per unit.

Question 4

According to Figure 13-7 above,when the price for Red Baron frozen cheese pizzas is $8 per pizza,how many pizzas will it sell?

Accepted Answer

A) 1,000,000 
B) 2,000,000 
C) 2,500,000 
D) 3,000,000 
E) 4,000,000 
A) 1,000,000 
B) 2,000,000 
C) 2,500,000 
D) 3,000,000 
E) 4,000,000

Question 5

Recently,much of the western U.S.experienced a drought condition and water usage was restricted in Denver.Yet,even though most people used less water,the price of water did not drop.When the drought was declared over,the water company raised water prices.However,the residents of Denver did not use less water.Here,water is

Accepted Answer

A) price elastic. 
B) price sensitive. 
C) price inelastic. 
D) price insensitive. 
E) unitary elastic. 
A) price elastic. 
B) price sensitive. 
C) price inelastic. 
D) price insensitive. 
E) unitary elastic.

Question 6

Which of the following are elements of Step 3 in the price-setting process?

Accepted Answer

A) profit,market share,and survival 
B) estimation of demand,sales revenue,and price elasticity 
C) cost estimation,marginal analysis,and break-even analysis 
D) demand for the product class and brand,newness of the product,and competition 
E) market segmentation targeting,and positioning 
A) profit,market share,and survival 
B) estimation of demand,sales revenue,and price elasticity 
C) cost estimation,marginal analysis,and break-even analysis 
D) demand for the product class and brand,newness of the product,and competition 
E) market segmentation targeting,and positioning

Question 7

Specifying the role of price in an organization's marketing and strategic plans is referred to as

Accepted Answer

A) choosing a pricing plan. 
B) defining a profit mission. 
C) developing pricing constraints. 
D) setting pricing objectives. 
E) determining the list or quoted price. 
A) choosing a pricing plan. 
B) defining a profit mission. 
C) developing pricing constraints. 
D) setting pricing objectives. 
E) determining the list or quoted price.

Question 8

Figure 13-2 above represents the six steps in setting price.Which letter represents the step where a firm would assess the constraints on the demand for the product class and brand?

Accepted Answer

A) "A" 
B) "B" 
C) "C" 
D) "D" 
E) "E" 
A) "A" 
B) "B" 
C) "C" 
D) "D" 
E) "E"

Question 9

There are factors other than price that affect demand.What are they and how do they work?

Accepted Answer

Price is not the complete story in estim

Question 10

The newer a product and the earlier it is in its life cycle,

Accepted Answer

A) the lower the price the firm must charge. 
B) the more competition it has. 
C) the higher is the price that can usually be charged. 
D) the lower its production costs are. 
E) the lower its unit variable cost is. 
A) the lower the price the firm must charge. 
B) the more competition it has. 
C) the higher is the price that can usually be charged. 
D) the lower its production costs are. 
E) the lower its unit variable cost is.

Question 11

Which of the following statements most likely would account for the shift in the demand curve from D2 to D3 shown in Figure 13-5B above?

Accepted Answer

A) The firm increased its prices and consumers perceived the value of the product to be greater. 
B) There were fewer product substitutes available in the marketplace. 
C) Competitors in the market raised their prices. 
D) A recession occurred that raised consumers' incomes. 
E) The firm's price remained the same but changes occurred in consumer tastes. 
A) The firm increased its prices and consumers perceived the value of the product to be greater. 
B) There were fewer product substitutes available in the marketplace. 
C) Competitors in the market raised their prices. 
D) A recession occurred that raised consumers' incomes. 
E) The firm's price remained the same but changes occurred in consumer tastes.

Question 12

The sum of the expenses of a firm that is stable and does not change with the quantity of the product that is produced and sold is referred to as

Accepted Answer

A) fixed cost. 
B) total cost. 
C) variable cost. 
D) marginal cost. 
E) overhead cost. 
A) fixed cost. 
B) total cost. 
C) variable cost. 
D) marginal cost. 
E) overhead cost.

Question 13

Creative marketers engage in value-pricing,which is the practice of simultaneously increasing product and service benefits while __________.

Accepted Answer

A) increasing costs 
B) increasing price 
C) increasing advertising 
D) decreasing costs 
E) maintaining or decreasing price 
A) increasing costs 
B) increasing price 
C) increasing advertising 
D) decreasing costs 
E) maintaining or decreasing price

Question 14

A 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,and hand soap 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 15

Price transparency is

Accepted Answer

A) the practice of changing prices for products and services in real time in response to supply and demand conditions. 
B) a consumer's near-instantaneous access to competitor's prices for the same offering. 
C) the practice of simultaneously increasing product and service benefits while maintaining or decreasing price. 
D) the practice of replacing promotional allowances with lower manufacturer list prices. 
E) the ratio of perceived benefits to price. 
A) the practice of changing prices for products and services in real time in response to supply and demand conditions. 
B) a consumer's near-instantaneous access to competitor's prices for the same offering. 
C) the practice of simultaneously increasing product and service benefits while maintaining or decreasing price. 
D) the practice of replacing promotional allowances with lower manufacturer list prices. 
E) the ratio of perceived benefits to price.

Question 16

Jane Westerlund owns a picture frame store and has generated a spreadsheet of several calculations based on different quantity,price,revenue,cost,and profit scenarios shown in Figure 13-9 above.What is the break-even point quantity for her picture frame store?

Accepted Answer

A) 0 
B) 400 
C) 800 
D) 1,200 
E) 2,000 
A) 0 
B) 400 
C) 800 
D) 1,200 
E) 2,000

Question 17

Using Figure 13-4 above,how much price competition is likely for small coffee shops?

Accepted Answer

A) There is almost none;the market sets the price. 
B) There are many sellers competing within a range of prices. 
C) There is generally a price leader that sets the price. 
D) Starbucks sets the price and all other coffee shops follow its lead. 
E) Price is set by the seller but regulated by the government. 
A) There is almost none;the market sets the price. 
B) There are many sellers competing within a range of prices. 
C) There is generally a price leader that sets the price. 
D) Starbucks sets the price and all other coffee shops follow its lead. 
E) Price is set by the seller but regulated by the government.

Question 18

A major grocery chain pays its baggers a regular hourly wage.The baggers not only pack the groceries,they also will take customers' groceries to their car,regardless of the weather.The baggers are not permitted to accept tips,even if they are offered.This carryout service is an example of

Accepted Answer

A) pricing enhancement. 
B) societal pricing. 
C) revenue sharing. 
D) value-pricing. 
E) cost-pricing. 
A) pricing enhancement. 
B) societal pricing. 
C) revenue sharing. 
D) value-pricing. 
E) cost-pricing.

Question 19

Unit variable cost refers to variable cost expressed

Accepted Answer

A) as the sum of all units sold. 
B) on a per unit basis for a product. 
C) as a percentage of total sales. 
D) as a percentage of fixed costs. 
E) as a percentage of total costs. 
A) as the sum of all units sold. 
B) on a per unit basis for a product. 
C) as a percentage of total sales. 
D) as a percentage of fixed costs. 
E) as a percentage of total costs.

Question 20

Marketing managers often use break-even analysis to analyze the relationship between total revenue and total cost to determine profitability at various levels of output.What is the break-even formula? Use the formula to calculate how many DVD players a dealer must sell if her fixed costs are $100,000,unit variable costs are $150,and the selling price is $200.

Accepted Answer

The break-even point (BEP)is the quantit

A firm's profit equation equals

In Figure 13-5B above,the demand curve shifts from D₂ to D₃.This most likely represents

According to Figure 13-7 above,when the price for Red Baron frozen cheese pizzas is $8 per pizza,how many pizzas will it sell?

Which of the following are elements of Step 3 in the price-setting process?

Specifying the role of price in an organization's marketing and strategic plans is referred to as

Figure 13-2 above represents the six steps in setting price.Which letter represents the step where a firm would assess the constraints on the demand for the product class and brand?

There are factors other than price that affect demand.What are they and how do they work?

The newer a product and the earlier it is in its life cycle,

Which of the following statements most likely would account for the shift in the demand curve from D₂ to D₃shown in Figure 13-5B above?

The sum of the expenses of a firm that is stable and does not change with the quantity of the product that is produced and sold is referred to as

Creative marketers engage in value-pricing,which is the practice of simultaneously increasing product and service benefits while __________.

Price transparency is

Jane Westerlund owns a picture frame store and has generated a spreadsheet of several calculations based on different quantity,price,revenue,cost,and profit scenarios shown in Figure 13-9 above.What is the break-even point quantity for her picture frame store?

Using Figure 13-4 above,how much price competition is likely for small coffee shops?

A major grocery chain pays its baggers a regular hourly wage.The baggers not only pack the groceries,they also will take customers' groceries to their car,regardless of the weather.The baggers are not permitted to accept tips,even if they are offered.This carryout service is an example of

Unit variable cost refers to variable cost expressed

Creating Customer Relationships and Value Through Marketing

Developing Successful Organizational and Marketing Strategies

Scanning the Marketing Environment

Ethical and Social Responsibility in 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 to Connect With Consumers

Personal Selling and Sales Management

Implementing Interactive and Multichannel Marketing

Pulling It All Together: the Strategic Marketing Process

Building an Effective Marketing Plan

Financial Aspects of Marketing

Filters

Exam 13: Building the Price Foundation

A firm's profit equation equals

In Figure 13-5B above,the demand curve shifts from D2 to D3.This most likely represents

According to Figure 13-7 above,when the price for Red Baron frozen cheese pizzas is $8 per pizza,how many pizzas will it sell?

Which of the following are elements of Step 3 in the price-setting process?

Specifying the role of price in an organization's marketing and strategic plans is referred to as

Figure 13-2 above represents the six steps in setting price.Which letter represents the step where a firm would assess the constraints on the demand for the product class and brand?

There are factors other than price that affect demand.What are they and how do they work?

The newer a product and the earlier it is in its life cycle,

Which of the following statements most likely would account for the shift in the demand curve from D2 to D3 shown in Figure 13-5B above?

The sum of the expenses of a firm that is stable and does not change with the quantity of the product that is produced and sold is referred to as

Creative marketers engage in value-pricing,which is the practice of simultaneously increasing product and service benefits while __________.

Price transparency is

Jane Westerlund owns a picture frame store and has generated a spreadsheet of several calculations based on different quantity,price,revenue,cost,and profit scenarios shown in Figure 13-9 above.What is the break-even point quantity for her picture frame store?

Using Figure 13-4 above,how much price competition is likely for small coffee shops?

A major grocery chain pays its baggers a regular hourly wage.The baggers not only pack the groceries,they also will take customers' groceries to their car,regardless of the weather.The baggers are not permitted to accept tips,even if they are offered.This carryout service is an example of

Unit variable cost refers to variable cost expressed

Creating Customer Relationships and Value Through Marketing

Developing Successful Organizational and Marketing Strategies

Scanning the Marketing Environment

Ethical and Social Responsibility in 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 to Connect With Consumers

Personal Selling and Sales Management

Implementing Interactive and Multichannel Marketing

Pulling It All Together: the Strategic Marketing Process

Building an Effective Marketing Plan

Financial Aspects of Marketing

Filters

In Figure 13-5B above,the demand curve shifts from D₂ to D₃.This most likely represents

Which of the following statements most likely would account for the shift in the demand curve from D₂ to D₃shown in Figure 13-5B above?