Question 1

The competitive market situation in which the few sellers are sensitive to each other's prices is referred to as

Accepted Answer

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

Question 2

A break-even chart refers to a graphic presentation

Accepted Answer

A) that shows the maximum number of units that will be sold at a certain price. 
B) of a break-even analysis that shows when total revenue and total cost intersect to identify profit or loss for a given quantity sold. 
C) that relates variable costs in terms of product or service substitutes in order to determine which items or services would least affect total revenues. 
D) that relates profits and revenues versus total costs in order to determine the time frame in which a company could achieve profitability. 
E) is a form of scatter graph used to identify specific activities or items that are creating the greatest return on investment. 
A) that shows the maximum number of units that will be sold at a certain price. 
B) of a break-even analysis that shows when total revenue and total cost intersect to identify profit or loss for a given quantity sold. 
C) that relates variable costs in terms of product or service substitutes in order to determine which items or services would least affect total revenues. 
D) that relates profits and revenues versus total costs in order to determine the time frame in which a company could achieve profitability. 
E) is a form of scatter graph used to identify specific activities or items that are creating the greatest return on investment.

Question 3

Price elasticity of demand is determined by a number of factors,such as the necessity of the product or service,the cash outlay of the purchase relative to a person's disposable income,and

Accepted Answer

A) the stage of the product or service in its product life cycle. 
B) the degree of carrying costs for the manufacturer or distributor. 
C) the availability of substitutes. 
D) the financial resources of the organization itself. 
E) the ability of the organization to meet sudden increases in demand. 
A) the stage of the product or service in its product life cycle. 
B) the degree of carrying costs for the manufacturer or distributor. 
C) the availability of substitutes. 
D) the financial resources of the organization itself. 
E) the ability of the organization to meet sudden increases in demand.

Question 4

The change in total cost that results from producing and marketing one additional unit of product is referred to as

Accepted Answer

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

Question 5

All of the following are demand factors EXCEPT:

Accepted Answer

A) the price of similar products. 
B) consumer tastes. 
C) consumer income. 
D) the availability of similar products. 
E) the number of distribution outlets carrying the product. 
A) the price of similar products. 
B) consumer tastes. 
C) consumer income. 
D) the availability of similar products. 
E) the number of distribution outlets carrying the product.

Question 6

In Figure 13-4 above,column "C" represents which type of competitive market?

Accepted Answer

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

Question 7

Which of the following represent elements of Step 2 of 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 8

Total revenue refers to

Accepted Answer

A) the profit made from selling a product or service. 
B) the net gain in sales revenue if the unit price is lowered. 
C) the least number of units sold needed to cover product,distribution,and promotional costs. 
D) the amount at which marginal costs exceed fixed costs. 
E) the total money received from the sale of a product. 
A) the profit made from selling a product or service. 
B) the net gain in sales revenue if the unit price is lowered. 
C) the least number of units sold needed to cover product,distribution,and promotional costs. 
D) the amount at which marginal costs exceed fixed costs. 
E) the total money received from the sale of a product.

Question 9

Which of the following statements regarding sales goals is MOST ACCURATE?

Accepted Answer

A) For marketing managers,sales revenue or unit sales can be easily translated into meaningful targets for a product line or brand. 
B) Cutting prices for a single product in a product line to raise unit sales often results in an increase in sales for related products in the line. 
C) Very often,cutting prices results in a decrease in market share. 
D) Setting unit volume sales as a pricing objective results in price wars with competitors,so the practice is limited to industries with few competitors. 
E) An advantage of increasing unit volume sales is that it always results in an increase in profits. 
A) For marketing managers,sales revenue or unit sales can be easily translated into meaningful targets for a product line or brand. 
B) Cutting prices for a single product in a product line to raise unit sales often results in an increase in sales for related products in the line. 
C) Very often,cutting prices results in a decrease in market share. 
D) Setting unit volume sales as a pricing objective results in price wars with competitors,so the practice is limited to industries with few competitors. 
E) An advantage of increasing unit volume sales is that it always results in an increase in profits.

Question 10

Which of the following statements regarding pricing constraints is MOST ACCURATE?

Accepted Answer

A) Generally,the greater the demand for a product,the higher the price that can be set. 
B) At the corporate level,when setting pricing constraints,a firm must disregard current conditions in the marketplace because they are too temporal for long-term planning. 
C) Pricing constraints must always be set,but they are rarely enforced. 
D) It is possible to create pricing constraints with the greatest range possible in order to anticipate any and all changes in the marketing environment. 
E) Even if a firm is trying to satisfy its obligations to its customers and society in general,it should ignore setting pricing constraints. 
A) Generally,the greater the demand for a product,the higher the price that can be set. 
B) At the corporate level,when setting pricing constraints,a firm must disregard current conditions in the marketplace because they are too temporal for long-term planning. 
C) Pricing constraints must always be set,but they are rarely enforced. 
D) It is possible to create pricing constraints with the greatest range possible in order to anticipate any and all changes in the marketing environment. 
E) Even if a firm is trying to satisfy its obligations to its customers and society in general,it should ignore setting pricing constraints.

Question 11

Which of the following statements regarding the seller's price is MOST ACCURATE?

Accepted Answer

A) Internet price changes are regulated by the Internet Fair Practices Act to protect consumers against price gouging. 
B) The seller's price is constrained by the type of market within which it competes. 
C) Price changes cannot be regulated in a monopoly. 
D) The type of market has little or no impact on a firm in a monopolistic competitive environment. 
E) Competitive environments should affect a firm's pricing objectives,but not its actual product prices. 
A) Internet price changes are regulated by the Internet Fair Practices Act to protect consumers against price gouging. 
B) The seller's price is constrained by the type of market within which it competes. 
C) Price changes cannot be regulated in a monopoly. 
D) The type of market has little or no impact on a firm in a monopolistic competitive environment. 
E) Competitive environments should affect a firm's pricing objectives,but not its actual product prices.

Question 12

The American Eagle Outfitters in-store signage photo above shows that customers can buy an American Eagle Outfitters hoodie for $24.95 and then purchase another one for 50 percent off (BOGO Deal "A").Another BOGO deal (not shown above)offers consumers a markdown of 10 percent if they buy two hoodies (BOGO Deal "B").In a third BOGO deal (not shown above),a retailer has marked down the price of hoodies from $24.95 to $22.95 per hoodie,so you'll consider buying two at that price (BOGO Deal "C").BOGO deal #4 (not shown above)offers consumers the following terms: 5 percent off the first item and then 10 percent off the reduced price for the second item (BOGO Deal "D").Finally,a fifth BOGO deal offers consumers the following terms: $10 off of all purchases of $40 or more (BOGO Deal "E").Which BOGO deal offers the best value (least cost)to consumers for the purchase of American Eagle Outfitters hoodies?

Accepted Answer

A) BOGO Deal "A" 
B) BOGO Deal "B" 
C) BOGO Deal "C" 
D) BOGO Deal "D" 
E) BOGO Deal "E" 
A) BOGO Deal "A" 
B) BOGO Deal "B" 
C) BOGO Deal "C" 
D) BOGO Deal "D" 
E) BOGO Deal "E"

Question 13

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

Accepted Answer

A) estimate demand and revenue. 
B) identify pricing objectives and constraints. 
C) scan competitors for prices of similar products or services. 
D) select the appropriate pricing formula. 
E) determine cost,volume,and profit relationships. 
A) estimate demand and revenue. 
B) identify pricing objectives and constraints. 
C) scan competitors for prices of similar products or services. 
D) select the appropriate pricing formula. 
E) determine cost,volume,and profit relationships.

Question 14

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

Accepted Answer

A) raise initial capital. 
B) identify pricing objectives and constraints. 
C) scan competitors for prices of similar products or services. 
D) select the appropriate pricing formula. 
E) establish the price range. 
A) raise initial capital. 
B) identify pricing objectives and constraints. 
C) scan competitors for prices of similar products or services. 
D) select the appropriate pricing formula. 
E) establish the price range.

Question 15

Acme Shoe Company sells heel replacement kits for men's shoes.It has fixed costs of $9 million and unit variable costs of $5 per pair.Acme is considering a switch from manual labor to an automated process.New equipment would cost an additional $4 million per year while lowering variable costs by $3 per shoe repair kit.How many kits would Acme have to sell at $17 per pair to make $2 million in profits in the next year with the automated process?

Accepted Answer

A) 117,648 kits 
B) 428,572 kits 
C) 705,883 kits 
D) 916,667 kits 
E) 1,000,000 kits 
A) 117,648 kits 
B) 428,572 kits 
C) 705,883 kits 
D) 916,667 kits 
E) 1,000,000 kits

Question 16

Many cosmetology schools allow their advanced students to style hair for "real world" clients for a reduced fee.The students benefit from the experience,the clients get a less expensive haircut,and the school is able to provide students with additional training without costing it anything;in fact,they even profit from it.This is an example of

Accepted Answer

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

Question 17

Jane Westerlund owns a picture-framing store,The Caplow Co.The average price she receives for a framed picture is $120.This price must cover her costs for a typical framed picture,which consists of $5 for glass,$2 for matting,$13 for the frame,and $30 for the labor involved.She must also cover monthly expenses of $1,000 for rent and insurance,$200 for heat and electricity,$500 for advertising,and $3,500 for her salary.Westerlund is considering buying an automatic matte-cutting machine in order to reduce the number of hours of direct labor required to produce a framed picture.In considering this purchase,she should recognize that this purchase will __________ Caplow's variable cost and __________ Caplow's fixed cost.

Accepted Answer

A) decrease;increase 
B) decrease;decrease 
C) increase;decrease 
D) increase;increase 
E) have no effect on;decrease 
A) decrease;increase 
B) decrease;decrease 
C) increase;decrease 
D) increase;increase 
E) have no effect on;decrease

Question 18

Three different objectives relate to a firm's profit,which is often measured in terms of return on investment.One objective,known as _________,is common in many firms because the targets can be set and performance measured quickly.

Accepted Answer

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

Question 19

A negative aspect of selecting unit volume as a pricing objective is that

Accepted Answer

A) production often can not keep up with demand. 
B) there are increased carrying costs with extensive inventories. 
C) if price reductions are used to achieve volume objectives,it can sometimes come at the expense of profits. 
D) it can create competition between divisions within the organization itself causing conflicts over the allocation of resources. 
E) it always positively correlates with a sales revenue objective. 
A) production often can not keep up with demand. 
B) there are increased carrying costs with extensive inventories. 
C) if price reductions are used to achieve volume objectives,it can sometimes come at the expense of profits. 
D) it can create competition between divisions within the organization itself causing conflicts over the allocation of resources. 
E) it always positively correlates with a sales revenue objective.

Question 20

A primary reason for Washburn's success is

Accepted Answer

A) underselling competitors by mass-producing fine-quality guitars. 
B) developing product lines at different price points for different market segments. 
C) offering significant price breaks to well-known performers in exchange for product endorsements. 
D) selling traditional American "rock 'n roll" guitars in global markets. 
E) setting up free music programs and donating low-price-point guitars to students in schools that have lost their music programs due to budget constraints. 
A) underselling competitors by mass-producing fine-quality guitars. 
B) developing product lines at different price points for different market segments. 
C) offering significant price breaks to well-known performers in exchange for product endorsements. 
D) selling traditional American "rock 'n roll" guitars in global markets. 
E) setting up free music programs and donating low-price-point guitars to students in schools that have lost their music programs due to budget constraints.

The competitive market situation in which the few sellers are sensitive to each other's prices is referred to as

A break-even chart refers to a graphic presentation

Price elasticity of demand is determined by a number of factors,such as the necessity of the product or service,the cash outlay of the purchase relative to a person's disposable income,and

The change in total cost that results from producing and marketing one additional unit of product is referred to as

All of the following are demand factors EXCEPT:

In Figure 13-4 above,column "C" represents which type of competitive market?

Which of the following represent elements of Step 2 of the price-setting process?

Total revenue refers to

Which of the following statements regarding sales goals is MOST ACCURATE?

Which of the following statements regarding pricing constraints is MOST ACCURATE?

Which of the following statements regarding the seller's price is MOST ACCURATE?

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

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

Three different objectives relate to a firm's profit,which is often measured in terms of return on investment.One objective,known as _________,is common in many firms because the targets can be set and performance measured quickly.

A negative aspect of selecting unit volume as a pricing objective is that

A primary reason for Washburn's success is

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

The competitive market situation in which the few sellers are sensitive to each other's prices is referred to as

A break-even chart refers to a graphic presentation

Price elasticity of demand is determined by a number of factors,such as the necessity of the product or service,the cash outlay of the purchase relative to a person's disposable income,and

The change in total cost that results from producing and marketing one additional unit of product is referred to as

All of the following are demand factors EXCEPT:

In Figure 13-4 above,column "C" represents which type of competitive market?

Which of the following represent elements of Step 2 of the price-setting process?

Total revenue refers to

Which of the following statements regarding sales goals is MOST ACCURATE?

Which of the following statements regarding pricing constraints is MOST ACCURATE?

Which of the following statements regarding the seller's price is MOST ACCURATE?

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

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

Three different objectives relate to a firm's profit,which is often measured in terms of return on investment.One objective,known as _________,is common in many firms because the targets can be set and performance measured quickly.

A negative aspect of selecting unit volume as a pricing objective is that

A primary reason for Washburn's success is

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