Question 1

A firm's profit equation demonstrates that profit equals __________.

Accepted Answer

A) Total cost + Total revenue 
B) Total revenue − Total cost 
C) Marginal revenue − Marginal cost 
D) Price × Quantity 
E) Total revenue + Marginal cost 
A) Total cost + Total revenue 
B) Total revenue − Total cost 
C) Marginal revenue − Marginal cost 
D) Price × Quantity 
E) Total revenue + Marginal cost

Question 2

From a marketing viewpoint,__________ is the money or other considerations (including other products and services)exchanged for the ownership or use of a product or service.

Accepted Answer

A) value 
B) price 
C) barter 
D) currency 
E) a tariff 
A) value 
B) price 
C) barter 
D) currency 
E) a tariff

Question 3

A technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output is referred to as __________.

Accepted Answer

A) break-even analysis 
B) marginal analysis 
C) sensitivity analysis 
D) market analysis 
E) tipping point analysis 
A) break-even analysis 
B) marginal analysis 
C) sensitivity analysis 
D) market analysis 
E) tipping point analysis

Question 4

The marketplace sets the price for wheat,so farmers who are trying to sell their wheat crops don't have to create a pricing strategy.The wheat is sold in a(n)__________ type of competitive market.

Accepted Answer

A) oligopoly 
B) pure monopoly 
C) pure competition 
D) monopolistic competition 
E) monopolistic oligopoly 
A) oligopoly 
B) pure monopoly 
C) pure competition 
D) monopolistic competition 
E) monopolistic oligopoly

Question 5

Distinguish between elastic demand and inelastic demand.

Accepted Answer

Elastic demand exists when a small perce

Question 6

SHAPE magazine is targeted at young women seeking healthier lifestyles.At a price of $3.00 per copy,1.25 million copies are sold.If the price per issue is increased to $3.25,only 1 million copies would be sold.Fixed costs are $1 million and unit variable costs are $0.50 per magazine.From the information provided here,what is SHAPE magazine's total revenue obtained at the lower $3.00 price?

Accepted Answer

A) $3,750,000 
B) $3,250,000 
C) $3,000,000 
D) $2,125,000 
E) $1,750,000 
A) $3,750,000 
B) $3,250,000 
C) $3,000,000 
D) $2,125,000 
E) $1,750,000

Question 7

Economists have identified four types of competitive markets: pure monopoly,monopolistic competition,oligopoly,and __________.

Accepted Answer

A) pure competition 
B) government-dominated 
C) capitalist 
D) socialist 
E) communist 
A) pure competition 
B) government-dominated 
C) capitalist 
D) socialist 
E) communist

Question 8

Which of the following would be an example of a constraint in Step 1 of the price-setting process?

Accepted Answer

A) "We can rely on our reputation for our other products in the line." 
B) "Experts are predicting a surge in global demand." 
C) "We need to make allowances for large quantity orders." 
D) "We should increase the price during the holiday shopping season." 
E) "We're going to face some stiff competition." 
A) "We can rely on our reputation for our other products in the line." 
B) "Experts are predicting a surge in global demand." 
C) "We need to make allowances for large quantity orders." 
D) "We should increase the price during the holiday shopping season." 
E) "We're going to face some stiff competition."

Question 9

Figure 13-7 above shows that to maximize revenue,Red Baron should price its frozen cheese pizzas at __________ per unit.

Accepted Answer

A) $4 
B) $5 
C) $6 
D) $8 
E) $10 
A) $4 
B) $5 
C) $6 
D) $8 
E) $10

Question 10

What pricing strategy is used when a seller changes prices in response to its existing inventory and the prices of its competitors?

Accepted Answer

A) price matching 
B) competitive parity pricing 
C) every day low pricing 
D) dynamic pricing 
E) showrooming 
A) price matching 
B) competitive parity pricing 
C) every day low pricing 
D) dynamic pricing 
E) showrooming

Question 11

Figure 13-2 above represents the six steps in setting price."E" represents the step at which a firm would

Accepted Answer

A) set list or quoted price. 
B) select an approximate price level. 
C) scan competitors for prices of similar products or services. 
D) determine cost,volume,and profit relationships. 
E) establish the price range. 
A) set list or quoted price. 
B) select an approximate price level. 
C) scan competitors for prices of similar products or services. 
D) determine cost,volume,and profit relationships. 
E) establish the price range.

Question 12

Figure 13-2 above represents the six steps in setting price.Which letter represents the step where a firm would identify pricing objectives such as profit,market share,and survival?

Accepted Answer

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

Question 13

Economists have identified four types of competitive markets: pure monopoly,monopolistic competition,pure competition,and __________.

Accepted Answer

A) capitalism 
B) socialism 
C) consumer-dominated 
D) oligopoly 
E) government-dominated 
A) capitalism 
B) socialism 
C) consumer-dominated 
D) oligopoly 
E) government-dominated

Question 14

Products such as disposable diapers usually have

Accepted Answer

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

Question 15

Which of the following statements is MOST ACCURATE?

Accepted Answer

A) Nonprofit organizations are exempt from having to cover the costs of producing and/or marketing their products. 
B) Socially responsible corporations should have the pricing constraint of covering all costs of producing and marketing their products,but they should not price their products to earn a profit. 
C) Marketers must ensure that firms in their channels of distribution must make an adequate profit or they will be cut off from their customers. 
D) Price elasticity of demand makes it virtually impossible for companies to cover all their marketing and production costs at all times. 
E) Marketing and production costs are the most difficult and expensive aspect of pricing because they draw so much capital away from other departments in the organization. 
A) Nonprofit organizations are exempt from having to cover the costs of producing and/or marketing their products. 
B) Socially responsible corporations should have the pricing constraint of covering all costs of producing and marketing their products,but they should not price their products to earn a profit. 
C) Marketers must ensure that firms in their channels of distribution must make an adequate profit or they will be cut off from their customers. 
D) Price elasticity of demand makes it virtually impossible for companies to cover all their marketing and production costs at all times. 
E) Marketing and production costs are the most difficult and expensive aspect of pricing because they draw so much capital away from other departments in the organization.

Question 16

Inelastic demand exists when

Accepted Answer

A) a small percentage decrease in price produces a smaller percentage increase in quantity demanded. 
B) a small percentage increase in price produces a larger percentage increase in quantity demanded. 
C) an increase in price is impossible due to government restrictions. 
D) the quantity demanded remains the same regardless of any changes in marketing strategies. 
E) a small percentage decrease in price produces a smaller percentage increase in quantity supplied. 
A) a small percentage decrease in price produces a smaller percentage increase in quantity demanded. 
B) a small percentage increase in price produces a larger percentage increase in quantity demanded. 
C) an increase in price is impossible due to government restrictions. 
D) the quantity demanded remains the same regardless of any changes in marketing strategies. 
E) a small percentage decrease in price produces a smaller percentage increase in quantity supplied.

Question 17

Which of the following would be an example of an objective in Step 1 of the price-setting process?

Accepted Answer

A) "We need to set an initial price of $259 dollars per unit." 
B) "We need to obtain a ten percent market share." 
C) "We need to find the least expensive distributor." 
D) "We need to make allowances for large quantity orders." 
E) "We need to increase the price during the holiday shopping season." 
A) "We need to set an initial price of $259 dollars per unit." 
B) "We need to obtain a ten percent market share." 
C) "We need to find the least expensive distributor." 
D) "We need to make allowances for large quantity orders." 
E) "We need to increase the price during the holiday shopping season."

Question 18

The use of "special fees" and "surcharges" is driven by consumers' zeal for __________ combined with the ease of making price comparisons on the Internet.

Accepted Answer

A) high prices 
B) low prices 
C) quality 
D) value 
E) warranties 
A) high prices 
B) low prices 
C) quality 
D) value 
E) warranties

Question 19

In which type of industry would a marketing director be MOST LIKELY to say,"We have to let the customer know that our product is the only one that comes with its own tracking device?"

Accepted Answer

A) pure monopoly 
B) oligopoly 
C) pure competition 
D) monopolistic oligopoly 
E) monopolistic competition 
A) pure monopoly 
B) oligopoly 
C) pure competition 
D) monopolistic oligopoly 
E) monopolistic competition

Question 20

Three different objectives relate to a firm's profit,which is often measured in terms of return on investment.One objective,known as __________,is where a company gives up immediate profit in exchange for achieving a higher market share in the hopes of penetrating competitive markets.

Accepted Answer

A) maximizing current profit 
B) target return 
C) break-even strategy 
D) minimizing risk 
E) managing for long-run profits 
A) maximizing current profit 
B) target return 
C) break-even strategy 
D) minimizing risk 
E) managing for long-run profits

Exam 13: Building the Price Foundation

A firm's profit equation demonstrates that profit equals __________.

From a marketing viewpoint,__________ is the money or other considerations (including other products and services)exchanged for the ownership or use of a product or service.

A technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output is referred to as __________.

The marketplace sets the price for wheat,so farmers who are trying to sell their wheat crops don't have to create a pricing strategy.The wheat is sold in a(n)__________ type of competitive market.

Distinguish between elastic demand and inelastic demand.

Economists have identified four types of competitive markets: pure monopoly,monopolistic competition,oligopoly,and __________.

Which of the following would be an example of a constraint in Step 1 of the price-setting process?

Figure 13-7 above shows that to maximize revenue,Red Baron should price its frozen cheese pizzas at __________ per unit.

What pricing strategy is used when a seller changes prices in response to its existing inventory and the prices of its competitors?

Figure 13-2 above represents the six steps in setting price."E" represents the step at which a firm would

Figure 13-2 above represents the six steps in setting price.Which letter represents the step where a firm would identify pricing objectives such as profit,market share,and survival?

Economists have identified four types of competitive markets: pure monopoly,monopolistic competition,pure competition,and __________.

Products such as disposable diapers usually have

Which of the following statements is MOST ACCURATE?

Inelastic demand exists when

Which of the following would be an example of an objective in Step 1 of the price-setting process?

The use of "special fees" and "surcharges" is driven by consumers' zeal for __________ combined with the ease of making price comparisons on the Internet.

In which type of industry would a marketing director be MOST LIKELY to say,"We have to let the customer know that our product is the only one that comes with its own tracking device?"

Three different objectives relate to a firm's profit,which is often measured in terms of return on investment.One objective,known as __________,is where a company gives up immediate profit in exchange for achieving a higher market share in the hopes of penetrating competitive markets.

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