Question 1

Which of the following happens if demand is elastic?

Accepted Answer

A) ​As price goes up, consumer demand changes. 
B) The competition between organizations reduces. 
C) There is no substitute for a product in such case. 
D) ​Purchasing power of the consumer decreases.

Question 2

To increase the popularity of its new range of smartphones,GizmoPro Inc.,a mobile phone manufacturer,offered several other products for free to customers who bought the smartphones.However,the management of GizmoPro Inc.soon found this to be an unsustainable practice.The company then decided to offer discounts on the products instead of giving them for free.These actions of the management of GizmoPro Inc.are aimed at:

Accepted Answer

A) ​market share pricing. 
B) profit maximization. 
C) demandorientation. 
D) ​sales maximization.

Question 3

Britney,a teenager,startsher own business of selling cupcakes to coffee shops and restaurants.She strives to increaseeither the market share in terms of the revenue generated or the number of cupcakes sold.This is an example of _____.

Accepted Answer

A) ​status quo pricing 
B) profit-oriented pricing objective 
C) bait pricing 
D) ​sales-oriented pricing objective

Question 4

Ava Lawnmowers Inc.is a company that manufactures and sells lawn mowers.Since it faces stiff competition in the market,it sells its products at different prices depending on the number of lawn movers purchased by the consumers.In this scenario,the company indulges in _____.

Accepted Answer

A) ​penetration pricing 
B) price skimming 
C) price discrimination 
D) ​predatory pricing

Question 5

Discuss how shopping bots help consumers with their purchase decisions.

Accepted Answer

The answer of Discuss how shopping bots help consumers with...

Question 6

Return on investment (ROI)for a firm:

Accepted Answer

A) ​is the margin of profit earned by the firm inclusive of the taxes payable by the firm. 
B) is its total assets multiplied by the net profits after taxes. 
C) measures management's overall effectiveness in generating profits with the available assets. 
D) ​will be lower than the previous year if the firm performs better in the market.

Question 7

To consumers,value is based upon:

Accepted Answer

A) ​the absolute monetary value of price. 
B) their perceived satisfaction. 
C) their ability to get discount on a product. 
D) ​the steadiness of price over a period of time.

Question 8

A cost that changes with the level of output is called a(n)_____.

Accepted Answer

A) ​liquid cost 
B) variable cost 
C) independent cost 
D) ​indirect cost

Question 9

_____ is a pricing policy whereby a firm charges a relatively low price for a product when it is first rolled out as a way to reach the mass market.

Accepted Answer

A) ​Penetration pricing 
B) Price skimming 
C) Price discrimination 
D) ​Status quo pricing

Question 10

Which of the following is an impact of the Internet on consumers' shopping behavior?

Accepted Answer

A) ​The Internet auction business is likely to disappear in the future. 
B) Consumer reviews on the Internet about various products tend to be equal in quality. 
C) Business-to-business auctions are likely to be the dominant form of Internet auction in the future. 
D) ​Extranets are programs that search the Internet for the best price for a particular product.

Question 11

While break-even pricing is relatively simple,markup pricing uses more complicated concepts of cost.

Accepted Answer

A) True 
 B)False

Question 12

Shopping bots theoretically give pricing power to:

Accepted Answer

A) ​consumers. 
B) wholesalers. 
C) retailers. 
D) ​agents.

Question 13

Dynamic pricing is most useful when the capacity of a product or service cannot be fixed well in advance.

Accepted Answer

A) True 
 B)False

Question 14

Unlike even-numbered prices,odd-numbered prices:

Accepted Answer

A) ​make consumers feel they are paying a higher price for a product. 
B) are used for "prestige" items. 
C) have elastic demand. 
D) ​connote a bargain.

Question 15

Which of the following is true of simple break-even analysis?

Accepted Answer

A) ​It ignores the selling price of a product. 
B) It does not give weightage to the cost of labor that is incurred during production. 
C) It is applicable only when the demand for a product is elastic. 
D) ​It ignores the demand for a product.

Question 16

Unlike niche-oriented shopping bots,broad-based shopping bots:

Accepted Answer

A) ​give pricing power to the retailers. 
B) search for prices for only one type of product. 
C) operate using a Yellow Pages type of model. 
D) ​include examples like SeatGeek(event tickets) andKayak(travel-related services).

Question 17

_____ is the selling to two or more different buyers,within a reasonably short time,of commodities (not services)of like grade and quality at different prices where the result would be to substantially lessen competition.

Accepted Answer

A) ​Price discrimination 
B) Price fixing 
C) Bait pricing 
D) ​Penetration pricing

Question 18

When retailers stock exclusive versions of products that have similar specifications to ones carried in other stores but have different model or serial numbers,it facilitates price matching.

Accepted Answer

A) True 
 B)False

Question 19

A _____ is a price reduction offered to a consumer,an industrial user,or a marketing intermediary in return for prompt payment of a bill.

Accepted Answer

A) ​cash discount 
B) quantity discount 
C) functional discount 
D) ​seasonal discount

Question 20

A rebate is a discount to wholesalers and retailers for performing channel functions.

Accepted Answer

A) True 
 B)False

Exam 19: Pricing Concepts

Which of the following happens if demand is elastic?

Britney,a teenager,startsher own business of selling cupcakes to coffee shops and restaurants.She strives to increaseeither the market share in terms of the revenue generated or the number of cupcakes sold.This is an example of _____.

Ava Lawnmowers Inc.is a company that manufactures and sells lawn mowers.Since it faces stiff competition in the market,it sells its products at different prices depending on the number of lawn movers purchased by the consumers.In this scenario,the company indulges in _____.

Discuss how shopping bots help consumers with their purchase decisions.

Return on investment (ROI) for a firm:

To consumers,value is based upon:

A cost that changes with the level of output is called a(n) _____.

_____ is a pricing policy whereby a firm charges a relatively low price for a product when it is first rolled out as a way to reach the mass market.

Which of the following is an impact of the Internet on consumers' shopping behavior?

While break-even pricing is relatively simple,markup pricing uses more complicated concepts of cost.

Shopping bots theoretically give pricing power to:

Dynamic pricing is most useful when the capacity of a product or service cannot be fixed well in advance.

Unlike even-numbered prices,odd-numbered prices:

Which of the following is true of simple break-even analysis?

Unlike niche-oriented shopping bots,broad-based shopping bots:

_____ is the selling to two or more different buyers,within a reasonably short time,of commodities (not services) of like grade and quality at different prices where the result would be to substantially lessen competition.

When retailers stock exclusive versions of products that have similar specifications to ones carried in other stores but have different model or serial numbers,it facilitates price matching.

A _____ is a price reduction offered to a consumer,an industrial user,or a marketing intermediary in return for prompt payment of a bill.

A rebate is a discount to wholesalers and retailers for performing channel functions.