Question 1

A reduction from the list price that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller is called

Accepted Answer

A)  the pretax price.
B)  the list price.
C)  the manufacturer's suggested retail price (MSRP) .
D)  a discount.
E)  a trade-in allowance.F) A) and E)
G) A) and D)

Question 2

Price fixing refers to

Accepted Answer

A)  an arrangement a manufacturer makes with a reseller to handle only its products and not those of a competitor.
B)  the practice of charging a very low price for a product with the intent of driving competitors out of business.
C)  the practice of charging different prices to different buyers for goods of like grade and quality.
D)  a conspiracy among firms to set prices for a product.
E)  a seller's requirement that the purchaser of one product also buy another product in the line.F) A) and D)
G) B) and C)

Question 3

For most products,it is difficult to identify a specific market price for a product or product class.Still,marketing managers often have a subjective feel for the competitors' price or market price.Using this benchmark,they then may deliberately choose a strategy of

Accepted Answer

A)  above-,at-,or below-market pricing.
B)  loss-leader pricing.
C)  penetration pricing.
D)  standard markup pricing.
E)  experience curve pricing.F) All of the above
G) A) and B)

Question 4

Skimming pricing is a strategy that introduces a new or innovative product by

Accepted Answer

A)  following a price elastic strategy.
B)  creating multiple price points.
C)  setting a high initial price.
D)  setting a low initial price.
E)  setting the price at the average of competitors' prices.F) A) and B)
G) B) and D)

Question 5

Penetration pricing refers to

Accepted Answer

A)  charging different prices to different buyers for goods of like grade and quality.
B)  setting the highest initial price that customers really desiring the product are willing to pay.
C)  setting a low initial price on a new product to appeal immediately to the mass market.
D)  setting a market price for a product or product class based on a subjective feel for the competitors' prices or market price.
E)  setting prices a few dollars or cents under an even number.F) B) and C)
G) C) and D) C

Question 6

Penetration pricing is intended to appeal to which market?

Accepted Answer

A)  highly selective,quality-seeking consumers
B)  price-insensitive markets
C)  specialty product markets
D)  the same markets as those targeted with a skimming pricing strategy
E)  the mass marketF) A) and C)
G) None of the above

Question 7

To encourage retailers to pay their bills quickly,manufacturers offer them

Accepted Answer

A)  quantity discounts.
B)  cash discounts.
C)  flexible pricing policies.
D)  promotional allowances.
E)  manufacturer's inducements.F) None of the above
G) C) and D)

Question 8

The prices for all furniture sold at American Furniture Warehouse end in $9.99,such as $599.99,$899.99,etc.American Furniture Warehouse uses

Accepted Answer

A)  odd-even pricing.
B)  dynamic pricing.
C)  price lining.
D)  bundle pricing.
E)  product line pricing.F) B) and D)
G) A) and C)

Question 9

Demand for a product is likely to be more price elastic if

Accepted Answer

A)  it is considered a necessity.
B)  it has many substitutes.
C)  it has few substitutes.
D)  it requires a small cash outlay.
E)  none of the above is true.F) A) and C)
G) A) and E)

Question 10

Tim Marlow,the owner of The Clock Works,wanted to know how many clocks he must sell in order to cover his fixed cost at a given price.Tim knew that he had a fixed cost of $20,000 for equipment,taxes,and a bank loan.He also had a unit variable cost of $20 per clock for labor and materials.If the price Tim charges for each of his clocks is $40,what is his break-even point quantity?

Accepted Answer

A)  100 clocks
B)  334 clocks
C)  500 clocks
D)  1,000 clocks
E)  10,000 clocksF) A) and B)
G) A) and D)

Question 11

Which of the following is a competition-oriented approach to pricing?

Accepted Answer

A)  skimming pricing
B)  target pricing
C)  loss-leader pricing
D)  target return-on-sales pricing
E)  standard markup pricingF) D) and E)
G) B) and C)

Question 12

A __________ approach often changes prices based on time,day,week,or season.

Accepted Answer

A)  skimming pricing
B)  bundle pricing
C)  yield management pricing
D)  target return on investment pricing
E)  standard markup pricingF) A) and E)
G) C) and E)

Question 13

Inelastic demand exists when

Accepted Answer

A)  a small percentage decrease in price produces a smaller percentage increase in quantity demanded.
B)  a small percentage increase in price produces a larger percentage increase in quantity demanded.
C)  an increase in price is impossible due to government restrictions.
D)  the quantity demanded remains the same regardless of any changes in marketing strategies.
E)  the price is governed by outsides entities but the demand remains high due to these restrictions that make the product exclusive.F) A) and C)
G) All of the above

Question 14

Price elasticity of demand is determined by a number of factors,such as the availability of substitutes,the necessity of the product or service,and

Accepted Answer

A)  the cash outlay of purchase relative to a person's disposable income.
B)  the stage of the product or service in its product life cycle.
C)  the degree of carrying costs for the manufacturer or distributor.
D)  the financial resources of the organization itself.
E)  the ability of the organization to meet sudden increases in demand.F) A) and D)
G) C) and D) A

Question 15

Target profit pricing refers to

Accepted Answer

A)  adjusting the price of a product so it is "in line" with that of its largest competitor.
B)  setting an annual target of a specific dollar volume of profit.
C)  setting the price of a line of products at a number of different price points.
D)  adding a fixed percentage to the cost of all items in a specific product class.
E)  setting prices to achieve a profit that is a specified percentage of production costs.F) A) and E)
G) None of the above

Question 16

What is the difference between fixed costs and variable costs?

Accepted Answer

Fixed cost is the sum of the expenses of...

Question 17

Four pricing practices are closely scrutinized because of potentially unethical or illegal actions.They include: (1) price fixing; (2) price discrimination; (3) predatory pricing; and (4) __________.

Accepted Answer

A)  price discounting
B)  deceptive pricing
C)  lateral price fixing
D)  regional rollbacks
E)  delayed payment penaltiesF) A) and B)
G) B) and D)

Question 18

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 responsibilityF) A) and E)
G) All of the above

Question 19

The key to setting a price for a product is finding an approximate price level to use as a reasonable starting point.Four common approaches to selecting an approximate price level are: (1) demand-oriented; (2) cost-oriented; (3) __________; and (4) competition-oriented approaches.

Accepted Answer

A)  stakeholder-oriented
B)  revenue-oriented
C)  profit-oriented
D)  distribution-oriented
E)  cause-orientedF) None of the above
G) A) and B)

Question 20

Deliberately selling a product below its customary price,not to increase sales,but to attract customers' attention in hopes that they will buy other products as well,is referred to as

Accepted Answer

A)  loss-leader pricing.
B)  bundle pricing.
C)  magnet pricing.
D)  predatory pricing.
E)  below-market pricing.F) All of the above
G) B) and C) A

Exam 11: Pricing Products and Services

A reduction from the list price that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller is called

Correct Answer
verified

Price fixing refers to

Correct Answer
verified

For most products,it is difficult to identify a specific market price for a product or product class.Still,marketing managers often have a subjective feel for the competitors' price or market price.Using this benchmark,they then may deliberately choose a strategy of

Correct Answer
verified

Skimming pricing is a strategy that introduces a new or innovative product by

Correct Answer
verified

Penetration pricing refers to

Correct Answer
verified
C

Penetration pricing is intended to appeal to which market?

Correct Answer
verified

To encourage retailers to pay their bills quickly,manufacturers offer them

Correct Answer
verified

The prices for all furniture sold at American Furniture Warehouse end in $9.99,such as $599.99,$899.99,etc.American Furniture Warehouse uses

Correct Answer
verified

Demand for a product is likely to be more price elastic if

Correct Answer
verified

Correct Answer
verified

Which of the following is a competition-oriented approach to pricing?

Correct Answer
verified

A __________ approach often changes prices based on time,day,week,or season.

Correct Answer
verified

Inelastic demand exists when

Correct Answer
verified

Price elasticity of demand is determined by a number of factors,such as the availability of substitutes,the necessity of the product or service,and

Correct Answer
verified
A

Target profit pricing refers to

Correct Answer
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What is the difference between fixed costs and variable costs?

Correct Answer
verified
Fixed cost is the sum of the expenses of...
View Answer

Four pricing practices are closely scrutinized because of potentially unethical or illegal actions.They include: (1) price fixing; (2) price discrimination; (3) predatory pricing; and (4) __________.

Correct Answer
verified

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

Correct Answer
verified

The key to setting a price for a product is finding an approximate price level to use as a reasonable starting point.Four common approaches to selecting an approximate price level are: (1) demand-oriented; (2) cost-oriented; (3) __________; and (4) competition-oriented approaches.

Correct Answer
verified

Deliberately selling a product below its customary price,not to increase sales,but to attract customers' attention in hopes that they will buy other products as well,is referred to as

Correct Answer
verified
A

Exam 11: Pricing Products and Services

A reduction from the list price that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller is called

Correct AnswerverifiedShow Answer

Price fixing refers to

Correct AnswerverifiedShow Answer

For most products,it is difficult to identify a specific market price for a product or product class.Still,marketing managers often have a subjective feel for the competitors' price or market price.Using this benchmark,they then may deliberately choose a strategy of

Correct AnswerverifiedShow Answer

Skimming pricing is a strategy that introduces a new or innovative product by

Correct AnswerverifiedShow Answer

Penetration pricing refers to

Correct AnswerverifiedC

Penetration pricing is intended to appeal to which market?

Correct AnswerverifiedShow Answer

To encourage retailers to pay their bills quickly,manufacturers offer them

Correct AnswerverifiedShow Answer

The prices for all furniture sold at American Furniture Warehouse end in $9.99,such as $599.99,$899.99,etc.American Furniture Warehouse uses

Correct AnswerverifiedShow Answer

Demand for a product is likely to be more price elastic if

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is a competition-oriented approach to pricing?

Correct AnswerverifiedShow Answer

A __________ approach often changes prices based on time,day,week,or season.

Correct AnswerverifiedShow Answer

Inelastic demand exists when

Correct AnswerverifiedShow Answer

Price elasticity of demand is determined by a number of factors,such as the availability of substitutes,the necessity of the product or service,and

Correct AnswerverifiedA

Target profit pricing refers to

Correct AnswerverifiedShow Answer

What is the difference between fixed costs and variable costs?

Correct AnswerverifiedFixed cost is the sum of the expenses of...View AnswerShow Answer

Four pricing practices are closely scrutinized because of potentially unethical or illegal actions.They include: (1) price fixing; (2) price discrimination; (3) predatory pricing; and (4) __________.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The key to setting a price for a product is finding an approximate price level to use as a reasonable starting point.Four common approaches to selecting an approximate price level are: (1) demand-oriented; (2) cost-oriented; (3) __________; and (4) competition-oriented approaches.

Correct AnswerverifiedShow Answer

Deliberately selling a product below its customary price,not to increase sales,but to attract customers' attention in hopes that they will buy other products as well,is referred to as

Correct AnswerverifiedA

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C

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A

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Fixed cost is the sum of the expenses of...
View Answer

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A