Question 1

What type of pricing objective would an organization use if it were in a favorable position and desired nothing more?

Accepted Answer

A)  Return on investment 
B)  Cash flow 
C)  Profit 
D)  Status quo 
E)  Survival

Question 2

How would pricing decisions differ for a business in an oligopolistic market structure as opposed to a monopolistic market structure?

Accepted Answer

The answer of How would pricing decisions differ for a...

Question 3

The point at which marginal revenue equals marginal cost is the breakeven point.

Accepted Answer

A) True 
 B)False

Question 4

What does the demand curve for a prestige product look like?

Accepted Answer

A)  It is a straight line where the quantity sold continues to increase as the price of each product increases. 
B)  It is a curve where the highest and the lowest prices yield the greatest quantity sold and mid-range prices produce the fewest sales. 
C)  It forms a curve where the greatest quantity sold comes at a medium price and the quantities fall as the price increases or decreases. 
D)  It forms a straight vertical line because of the prestige of the product, and quantity sold will remain stable regardless of the price. 
E)  It slopes from left to right at a very mild slope; that is, as quantity increases, price decreases slowly.

Question 5

Elastic demand is usually a result of the lack of substitute products.

Accepted Answer

A) True 
 B)False

Question 6

For most firms in the United States, demand curves are

Accepted Answer

A)  upward sloping. 
B)  completely horizontal. 
C)  completely vertical. 
D)  c-shaped. 
E)  downward sloping.

Question 7

What are the implications of a downward-sloping demand curve?

Accepted Answer

The answer of What are the implications of a downward-sloping...

Question 8

Which of the following is most likely to have an inelastic demand curve?

Accepted Answer

A)  Automobile 
B)  Vacation 
C)  Nonelective surgery 
D)  Recreational vehicle 
E)  Computer

Question 9

Under Armour is establishing a ______ pricing objective to maintain or increase its product's sales in relation to total industry sales.

Accepted Answer

A)  Return on investment 
B)  Survival 
C)  Product quality 
D)  Market share 
E)  Status quo

Question 10

The role played by attitudes toward price in the overall evaluation of the marketing mix is a minor concern in identifying the target market.

Accepted Answer

A) True 
 B)False

Question 11

Which pricing objective de-emphasizes price and can lead to a climate of nonprice competition in an industry?

Accepted Answer

A)  Status quo 
B)  Return on investment 
C)  Market share 
D)  Survival 
E)  Cash flow

Question 12

Customary pricing is based on tradition.

Accepted Answer

A) True 
 B)False

Question 13

Marketing mix variables are highly interrelated.

Accepted Answer

A) True 
 B)False

Question 14

Transfer pricing involves the sale of a product to another unit within the same organization.

Accepted Answer

A) True 
 B)False

Question 15

Generally, customers are most likely to rely on the price-quality association when

Accepted Answer

A)  they cannot judge the quality of the product for themselves. 
B)  the product is a well-known brand. 
C)  customers can judge the product's quality for themselves. 
D)  the product is purchased through the use of the Internet. 
E)  products are being purchased from well-established retailers that are familiar to customers.

Question 16

Which of the following statements is true about breakeven analysis?

Accepted Answer

A)  The breakeven point can only be stated in terms of sales revenue. 
B)  At the breakeven point, the firm's fixed costs are greater than its variable costs. 
C)  At the breakeven point, the firm's fixed costs are less than its variable costs. 
D)  At the breakeven point, the firm's sales price per unit equals its variable cost per unit. 
E)  At the breakeven point, the firm's sales revenue equals the sum of its fixed and variable costs.

Question 17

Factors affecting pricing decisions can include demand, distribution, and the way in which the product is promoted.

Accepted Answer

A) True 
 B)False

Question 18

What type of pricing strategy is used in a situation where the seller has an ethical responsibility not to overcharge the client and the fees do not relate directly to the time and/or effort spent in specific cases?

Accepted Answer

A)  Price lining 
B)  Prestige pricing 
C)  Professional pricing 
D)  Customary pricing 
E)  Price skimming

Question 19

Chris is planning three sales during the third quarter of the year at Toys R' Us. The first is at the beginning of the school year, the second is the week before Halloween, and the third is Black Friday. These sales would be considered to be

Accepted Answer

A)  psychological pricing. 
B)  calendar discounting. 
C)  sales promotion pricing. 
D)  special-event pricing. 
E)  captive pricing.

Question 20

If Wrigley set its pricing objective as attaining 38 percent of the chewing gum market, what else would be needed to make this a true pricing objective?

Accepted Answer

A)  Statement of demand elasticities 
B)  Identification of cost structure 
C)  Breakeven analysis 
D)  Identification of a time period for accomplishment 
E)  Establishment of a subsequent pricing policy

Exam 12: Pricing Concepts and Management

What type of pricing objective would an organization use if it were in a favorable position and desired nothing more?

How would pricing decisions differ for a business in an oligopolistic market structure as opposed to a monopolistic market structure?

The point at which marginal revenue equals marginal cost is the breakeven point.

What does the demand curve for a prestige product look like?

Elastic demand is usually a result of the lack of substitute products.

For most firms in the United States, demand curves are

What are the implications of a downward-sloping demand curve?

Which of the following is most likely to have an inelastic demand curve?

Under Armour is establishing a ______ pricing objective to maintain or increase its product's sales in relation to total industry sales.

The role played by attitudes toward price in the overall evaluation of the marketing mix is a minor concern in identifying the target market.

Which pricing objective de-emphasizes price and can lead to a climate of nonprice competition in an industry?

Customary pricing is based on tradition.

Marketing mix variables are highly interrelated.

Transfer pricing involves the sale of a product to another unit within the same organization.

Generally, customers are most likely to rely on the price-quality association when

Which of the following statements is true about breakeven analysis?

Factors affecting pricing decisions can include demand, distribution, and the way in which the product is promoted.

What type of pricing strategy is used in a situation where the seller has an ethical responsibility not to overcharge the client and the fees do not relate directly to the time and/or effort spent in specific cases?

Chris is planning three sales during the third quarter of the year at Toys R' Us. The first is at the beginning of the school year, the second is the week before Halloween, and the third is Black Friday. These sales would be considered to be

If Wrigley set its pricing objective as attaining 38 percent of the chewing gum market, what else would be needed to make this a true pricing objective?