Question 1

Describe an oligopolistic competition. Why do price wars sometimes result in this type of competition?

Accepted Answer

The answer of Describe an oligopolistic competition. Why do price...

Question 2

When the price for Blu-ray players dropped, the demand for DVD players went down, based on this, DVD players and Blu-ray players are

Accepted Answer

A) complementary products. 
B) outsourced products. 
C) substitute products. 
D) interchangeable products. 
E) superior products.

Question 3

Consider a bakery in your community. Ingredients such as sugar and butter would be examples of _____ costs.

Accepted Answer

A) fixed 
B) incidental 
C) prestige 
D) inelastic 
E) variable

Question 4

Bryce would love to own a Lamborghini someday but he knows if he has to ask how much they cost, he probably can't afford it today. Products like Lamborghini automobiles are most likely to be associated with

Accepted Answer

A) cross-shopping. 
B) competitive parity pricing. 
C) target return value. 
D) prestige pricing. 
E) break-even point pricing.

Question 5

French luxury goods manufacturer and retailer Hermès is known for making expensive leather goods. But paying $300,168 for a handbag at auction, which is over the standard retail price of $280,000, is extraordinary, and not for the casual shopper. The handbag is considered a

Accepted Answer

A) product in demand. 
B) inelastic product. 
C) elastic product. 
D) custom product. 
E) prestige product.

Question 6

The more substitutes that exist in a market,

Accepted Answer

A) the lower the price elasticity for each product. 
B) the greater the income elasticity for each product. 
C) the easier it will be to utilize a target profit pricing strategy. 
D) the more sensitive consumers will be to changes in the price of a particular product. 
E) the more likely the market will be characterized as an oligopoly.

Question 7

Pricing strategies should be aligned with a firm's overall goals and objectives.

Accepted Answer

A) True 
 B)False

Question 8

One of the limitations associated with break-even analysis is that

Accepted Answer

A) it assumes fixed costs are zero. 
B) it cannot adjust for high variable costs. 
C) it tells marketers only what price is needed to break even. 
D) it assumes that there is only one price. 
E) it assumes that demand is extremely inelastic.

Question 9

________ products are products whose demands are positively related and as such, they rise or fall together.

Accepted Answer

A) Substitute 
B) Premium 
C) Elastic 
D) Inelastic 
E) Complementary

Question 10

An example of an objective set by a sales-oriented company is to institute a company-wide policy that all products must provide for at least an 18 percent profit margin to reach a particular profit goal for the firm.

Accepted Answer

A) True 
 B)False

Question 11

Which market is most likely to be characterized by oligopolistic competition in the United States?

Accepted Answer

A) soybeans 
B) pens and pencils 
C) commercial airline travel 
D) men's clothing 
E) electrical service to the home

Question 12

Because consumers are generally more sensitive to price increases than to price decreases, it is easier to lose current customers with a price increase than it is to gain new customers with a price decrease.

Accepted Answer

A) True 
 B)False

Question 13

Buying response to a teeth whitening product is considered to be elastic. This would suggest dropping the price would result in:

Accepted Answer

A) increased sales of the product 
B) decreased sales of the product 
C) static sales of the product 
D) delayed sales of the product 
E) the purchase of related tooth care products

Question 14

Marketers should view pricing decisions as an opportunity to create value.

Accepted Answer

A) True 
 B)False

Question 15

A "no haggle" pricing policy that makes a transaction easier for the buyer is a type of ________ pricing strategy.

Accepted Answer

A) maximizing profits 
B) sales orientation 
C) target return 
D) status quo 
E) customer-oriented

Question 16

If upscale manufacturers of prestige products like BMW autos, Tiffany glass, or Rolex watches offered lower-priced products, what might happen to the demand for their products? Why?

Accepted Answer

The answer of If upscale manufacturers of prestige products like...

Question 17

Variable costs change with

Accepted Answer

A) changes in fixed costs. 
B) changes in cross-price elasticity. 
C) changes in target return pricing. 
D) changes in the quantity being produced. 
E) competitive parity.

Question 18

A study found that, among addicted smokers, a 10 percent increase in the price of cigarettes resulted in a 2 percent decrease in quantity demanded. For these consumers, cigarettes have a(n)________ price elasticity demand.

Accepted Answer

A) elastic 
B) inelastic 
C) cross-price 
D) income effect 
E) substitution effect

Question 19

The price elasticity of demand for a specific brand of deodorant is 1. The market for this product is considered

Accepted Answer

A) inelastic. 
B) elastic. 
C) saturated. 
D) dynamic. 
E) a prestige market.

Exam 14: Pricing Concepts for Capturing Value

Describe an oligopolistic competition. Why do price wars sometimes result in this type of competition?

When the price for Blu-ray players dropped, the demand for DVD players went down, based on this, DVD players and Blu-ray players are

Consider a bakery in your community. Ingredients such as sugar and butter would be examples of _____ costs.

Bryce would love to own a Lamborghini someday but he knows if he has to ask how much they cost, he probably can't afford it today. Products like Lamborghini automobiles are most likely to be associated with

French luxury goods manufacturer and retailer Hermès is known for making expensive leather goods. But paying $300,168 for a handbag at auction, which is over the standard retail price of $280,000, is extraordinary, and not for the casual shopper. The handbag is considered a

The more substitutes that exist in a market,

Pricing strategies should be aligned with a firm's overall goals and objectives.

One of the limitations associated with break-even analysis is that

________ products are products whose demands are positively related and as such, they rise or fall together.

An example of an objective set by a sales-oriented company is to institute a company-wide policy that all products must provide for at least an 18 percent profit margin to reach a particular profit goal for the firm.

Which market is most likely to be characterized by oligopolistic competition in the United States?

Because consumers are generally more sensitive to price increases than to price decreases, it is easier to lose current customers with a price increase than it is to gain new customers with a price decrease.

Buying response to a teeth whitening product is considered to be elastic. This would suggest dropping the price would result in:

Marketers should view pricing decisions as an opportunity to create value.

A "no haggle" pricing policy that makes a transaction easier for the buyer is a type of ________ pricing strategy.

If upscale manufacturers of prestige products like BMW autos, Tiffany glass, or Rolex watches offered lower-priced products, what might happen to the demand for their products? Why?

Variable costs change with

A study found that, among addicted smokers, a 10 percent increase in the price of cigarettes resulted in a 2 percent decrease in quantity demanded. For these consumers, cigarettes have a(n) ________ price elasticity demand.

The price elasticity of demand for a specific brand of deodorant is 1. The market for this product is considered