Question 1

Describe a profit objective used by many Japanese manufacturing firms.

Accepted Answer

Managing for long-run profits is a prici

Question 2

Which of the following are examples of elements involved in Step 1 of the price-setting process: identify pricing objectives?

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 3

The sum of the expenses of the firm that 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) marginal cost. 
D) unit cost. 
E) variable cost. 
A) fixed cost. 
B) total cost. 
C) marginal cost. 
D) unit cost. 
E) variable cost.

Question 4

In Figure 13-10 above,which is a break-even chart that depicts a graphic presentation of a break-even analysis for a picture frame store,"A" identifies the firm's __________ point.

Accepted Answer

A) loss 
B) price 
C) value 
D) profit 
E) break-even 
A) loss 
B) price 
C) value 
D) profit 
E) break-even

Question 5

Suppose you are the owner of a picture frame store and you wish to calculate how many pictures you must sell to cover your fixed and variable costs at a given price.Let's assume that the demand for your pictures is strong,so the average price customers are willing to pay for each picture frame is $120.Also,suppose your current fixed costs (FC)total $32,000 (real estate taxes,interest on a bank loan,etc. )and your current unit variable cost (UVC)for a picture frame is $40 (labor,glass,frame,and matting).Now,suppose you decide to rent a machine for $18,000 that will speed up production so that you can guarantee that you could sell 2,000 picture frames.The new machine allows you to: (1)key in the dimensions needed to cut the frame,glass,and matting for any picture frame size; (2)reduce losses in miscut glass and mats;and (3)automate the production process to dramatically increase the output of framed pictures.This new technology will increases total fixed costs from $32,000 to $50,000.However,it will also lower variable costs from $40 to $20 per unit.Now,with the new machine,what would your profit (or loss)be if you sold 2,000 picture frames?

Accepted Answer

A) a loss of $32,000 
B) $0-only able to break-even 
C) $100,000 profit 
D) $108,000 profit 
E) $132,000 profit 
A) a loss of $32,000 
B) $0-only able to break-even 
C) $100,000 profit 
D) $108,000 profit 
E) $132,000 profit

Question 6

In Figure 13-10 above,which is a break-even chart that depicts a graphic presentation of a break-even analysis for a picture frame store,the tan/red-shaded area "EBCD" represents the firm's

Accepted Answer

A) fixed costs. 
B) break-even point. 
C) variable costs. 
D) profit. 
E) total revenue. 
A) fixed costs. 
B) break-even point. 
C) variable costs. 
D) profit. 
E) total revenue.

Question 7

The co-founders of Dollar Shave Club,came up with this idea: Use __________ to sell razor blades in monthly subscription packages dirt cheap compared to those from Gillette or Schick.

Accepted Answer

A) point-of-purchase displays in barber shops and hair salons like Great Clips and Super Cuts 
B) "daily deal" coupons from social media websites like Groupon and LivingSocial 
C) BOGO offers in direct response advertising shown on cable TV networks at night 
D) the sponsorship of the X Games televised on ESPN,whose viewers match the target market 
E) direct-to-consumer marketing via the Internet such as a YouTube video 
A) point-of-purchase displays in barber shops and hair salons like Great Clips and Super Cuts 
B) "daily deal" coupons from social media websites like Groupon and LivingSocial 
C) BOGO offers in direct response advertising shown on cable TV networks at night 
D) the sponsorship of the X Games televised on ESPN,whose viewers match the target market 
E) direct-to-consumer marketing via the Internet such as a YouTube video

Question 8

A firm may forgo higher profit on sales and follow which of the following pricing objectives because it wants to recognize its stakeholder obligations?

Accepted Answer

A) profit 
B) market share 
C) unit volume 
D) survival 
E) social responsibility 
A) profit 
B) market share 
C) unit volume 
D) survival 
E) social responsibility

Question 9

Figure 13-2 above represents the six steps in setting price.Which letter represents the step where a firm would estimate price elasticity?

Accepted Answer

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

Question 10

If competitive market circumstances are such that there are few sellers who are sensitive to each other's prices,and the purpose of advertising is to inform but avoid price competition,then __________ must exist in the industry.

Accepted Answer

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

Question 11

Figure 13-2 above represents the six steps in setting price."C" 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) determine cost,volume,and profit relationships. 
E) establish the price range. 
A) estimate demand and revenue. 
B) identify pricing objectives and constraints. 
C) scan competitors for prices of similar products or services. 
D) determine cost,volume,and profit relationships. 
E) establish the price range.

Question 12

Explain why price elasticity is important to marketing managers.

Accepted Answer

Price elasticity of demand is important

Question 13

Suppose you are the owner of a picture frame store and you wish to calculate how many pictures you must sell to cover your fixed and variable costs at a given price.Let's assume that the demand for your pictures is strong,so the average price customers are willing to pay for each picture frame is $120.Also,suppose your fixed costs (FC)total $32,000 (real estate taxes,interest on a bank loan,etc. )and unit variable cost (UVC)for a picture frame is $50 (labor,glass,frame,and matting).If your picture frame store sold 2,000 picture frames,what would your profit (or loss)be?

Accepted Answer

A) a loss of $32,000 
B) $0-only able to break-even 
C) $100,000 profit 
D) $108,000 profit 
E) $132,000 profit 
A) a loss of $32,000 
B) $0-only able to break-even 
C) $100,000 profit 
D) $108,000 profit 
E) $132,000 profit

Question 14

Which of the following statements regarding price changes is MOST ACCURATE?

Accepted Answer

A) Product prices should change monthly,whereas services prices should change quarterly. 
B) Changing a product's price too frequently creates antagonism among consumers,yet changing prices too infrequently makes them feel the company is not improving its product or service sufficiently. 
C) Supermarkets should change their prices every week since customers are expecting new prices in the weekly flyers they receive in the mail. 
D) Companies selling products over the Internet can instantly change their prices whenever the need arises. 
E) Internet price changes are regulated by the Internet Fair Practices Act to protect consumers against price gouging. 
A) Product prices should change monthly,whereas services prices should change quarterly. 
B) Changing a product's price too frequently creates antagonism among consumers,yet changing prices too infrequently makes them feel the company is not improving its product or service sufficiently. 
C) Supermarkets should change their prices every week since customers are expecting new prices in the weekly flyers they receive in the mail. 
D) Companies selling products over the Internet can instantly change their prices whenever the need arises. 
E) Internet price changes are regulated by the Internet Fair Practices Act to protect consumers against price gouging.

Question 15

Suppose you are the owner of a picture frame store.Let's assume that the average price customers are willing to pay for each picture frame is $120.Also,suppose your fixed costs (FC)total $32,000 (real estate taxes,interest on a bank loan,etc. )and unit variable cost (UVC)for a picture frame is $40 (labor,glass,frame,and matting).Figure 13-10 above shows that by selling 800 picture frames,you will

Accepted Answer

A) break even. 
B) earn a profit. 
C) incur a loss. 
D) have no fixed costs. 
E) have no variable costs. 
A) break even. 
B) earn a profit. 
C) incur a loss. 
D) have no fixed costs. 
E) have no variable costs.

Question 16

All of the following are examples of pricing objectives EXCEPT:

Accepted Answer

A) market share. 
B) survival. 
C) unit sales. 
D) social responsibility. 
E) competitors' prices. 
A) market share. 
B) survival. 
C) unit sales. 
D) social responsibility. 
E) competitors' prices.

Question 17

Calculate a firm's total revenue (TR)using the following information: the unit price (P)for a product is $40;the quantity sold (Q)is 2,000;the fixed cost (FC)is $50,000;and the variable cost (VC)is $20,000.

Accepted Answer

A) $10,000 
B) $50,000 
C) $110,000 
D) $150,000 
E) cannot be determined with the information provided 
A) $10,000 
B) $50,000 
C) $110,000 
D) $150,000 
E) cannot be determined with the information provided

Question 18

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

Accepted Answer

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

Question 19

Suppose you are the owner of a picture frame store and you wish to calculate how many pictures you must sell to cover your fixed and variable costs at a given price.Let's assume that the demand for your pictures is strong,so the average price customers are willing to pay for each picture frame is $125.Also,suppose your current fixed costs (FC)total $50,000 (real estate taxes,interest on a bank loan,etc. )and your current unit variable cost (UVC)for a picture frame is $50 (labor,glass,frame,and matting).Now,suppose you decide to rent a machine for $25,000 that will speed up production so that you can guarantee that you could sell 2,000 picture frames.The new machine allows you to: (1)key in the dimensions needed to cut the frame,glass,and matting for any picture frame size; (2)reduce losses in miscut glass and mats;and (3)automate the production process to dramatically increase the output of framed pictures.This new technology will increases fixed costs from $50,000 to $75,000.However,it will also lower variable costs from $50 to $25 per unit.Now,with the new machine,what will your profit (or loss)be if you sold 2,000 picture frames?

Accepted Answer

A) a loss of $75,000 
B) $0-only able to break-even 
C) $50,000 profit 
D) $75,000 profit 
E) $125,000 profit 
A) a loss of $75,000 
B) $0-only able to break-even 
C) $50,000 profit 
D) $75,000 profit 
E) $125,000 profit

Question 20

As shown in the McDonald's menu board photo above,McDonald's is most likely using which type of pricing strategy?

Accepted Answer

A) predatory pricing 
B) value pricing 
C) loss-leader pricing 
D) odd-even pricing 
E) barter 
A) predatory pricing 
B) value pricing 
C) loss-leader pricing 
D) odd-even pricing 
E) barter

Describe a profit objective used by many Japanese manufacturing firms.

Which of the following are examples of elements involved in Step 1 of the price-setting process: identify pricing objectives?

The sum of the expenses of the firm that change with the quantity of the product that is produced and sold is referred to as

In Figure 13-10 above,which is a break-even chart that depicts a graphic presentation of a break-even analysis for a picture frame store,"A" identifies the firm's __________ point.

In Figure 13-10 above,which is a break-even chart that depicts a graphic presentation of a break-even analysis for a picture frame store,the tan/red-shaded area "EBCD" represents the firm's

The co-founders of Dollar Shave Club,came up with this idea: Use __________ to sell razor blades in monthly subscription packages dirt cheap compared to those from Gillette or Schick.

A firm may forgo higher profit on sales and follow which of the following pricing objectives because it wants to recognize its stakeholder obligations?

Figure 13-2 above represents the six steps in setting price.Which letter represents the step where a firm would estimate price elasticity?

If competitive market circumstances are such that there are few sellers who are sensitive to each other's prices,and the purpose of advertising is to inform but avoid price competition,then __________ must exist in the industry.

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

Explain why price elasticity is important to marketing managers.

Which of the following statements regarding price changes is MOST ACCURATE?

All of the following are examples of pricing objectives EXCEPT:

Calculate a firm's total revenue (TR)using the following information: the unit price (P)for a product is $40;the quantity sold (Q)is 2,000;the fixed cost (FC)is $50,000;and the variable cost (VC)is $20,000.

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

As shown in the McDonald's menu board photo above,McDonald's is most likely using which type of pricing strategy?

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

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Exam 13: Building the Price Foundation

Describe a profit objective used by many Japanese manufacturing firms.

Which of the following are examples of elements involved in Step 1 of the price-setting process: identify pricing objectives?

The sum of the expenses of the firm that change with the quantity of the product that is produced and sold is referred to as

In Figure 13-10 above,which is a break-even chart that depicts a graphic presentation of a break-even analysis for a picture frame store,"A" identifies the firm's __________ point.

In Figure 13-10 above,which is a break-even chart that depicts a graphic presentation of a break-even analysis for a picture frame store,the tan/red-shaded area "EBCD" represents the firm's

The co-founders of Dollar Shave Club,came up with this idea: Use __________ to sell razor blades in monthly subscription packages dirt cheap compared to those from Gillette or Schick.

A firm may forgo higher profit on sales and follow which of the following pricing objectives because it wants to recognize its stakeholder obligations?

Figure 13-2 above represents the six steps in setting price.Which letter represents the step where a firm would estimate price elasticity?

If competitive market circumstances are such that there are few sellers who are sensitive to each other's prices,and the purpose of advertising is to inform but avoid price competition,then __________ must exist in the industry.

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

Explain why price elasticity is important to marketing managers.

Which of the following statements regarding price changes is MOST ACCURATE?

All of the following are examples of pricing objectives EXCEPT:

Calculate a firm's total revenue (TR)using the following information: the unit price (P)for a product is $40;the quantity sold (Q)is 2,000;the fixed cost (FC)is $50,000;and the variable cost (VC)is $20,000.

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

As shown in the McDonald's menu board photo above,McDonald's is most likely using which type of pricing strategy?

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