Question 1

Price lining is considered to be a ________ approach to pricing.

Accepted Answer

A)   cost-oriented
B)   demand-oriented
C)   profit-oriented
D)   competition-oriented
E)   service-orientedF) A) and C)
G) B) and D)

Question 2

Lady Marion Seafood, Inc., sells five-pound packages of Alaskan salmon. Assume that its unit variable cost per package is $30 and its fixed cost is $250,000. It wants a target profit of $38,000 based on a volume of 16,000 packages. What should the firm charge for a five-pound package of salmon?

Accepted Answer

A)   $25.00
B)   $33.94
C)   $40.00
D)   $48.00
E)   $61.25F) A) and D)
G) A) and C)

Question 3

Figure 14-4
-Figure 14-4 above illustrates which type of pricing approach?

Accepted Answer

A)   skimming
B)   penetration
C)   cost-plus
D)   price lining
E)   prestigeF) A) and B)
G) A) and C)

Question 4

Setting different prices for products and services in real time in response to supply and demand conditions is referred to as

Accepted Answer

A)   price lining.
B)   a dynamic pricing policy.
C)   customary pricing.
D)   price fixing.
E)   discretionary pricing.F) B) and E)
G) A) and E)

Question 5

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) All of the above
G) B) and C)

Question 6

Setting a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors is referred to as

Accepted Answer

A)   cost-plus pricing.
B)   customary pricing.
C)   standard markup pricing.
D)   loss-leader pricing.
E)   target profit pricing.F) B) and D)
G) A) and C)

Question 7

Summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price is referred to as

Accepted Answer

A)   standard markup pricing.
B)   experience-curve pricing.
C)   cost-plus pricing.
D)   product-line pricing.
E)   target return-on-investment pricing.F) C) and E)
G) A) and C)

Question 8

The practice of offering a bargain that is conditional on the purchase of other products may exist when a buyer is offered the "1-Cent Sales," the "Buy 1, Get 1 Free," or the "Get 2 for the Price of 1" deal. Such pricing is legal only if

Accepted Answer

A)   the seller is using bundle pricing.
B)   there is a reasonable amount of inventory to satisfy the needs of the retailers normal traffic flow.
C)   the first items are sold at the regular price, not a price inflated for the offer.
D)   the product is not outdated.
E)   the quantity available to the customer is not limited.F) None of the above
G) C) and D)

Question 9

Store frequently show items for sale with a price that appears to be reduced. Former price comparisons are deceptive if

Accepted Answer

A)   the high price tags were from a previous owner or retailer and were purchased that way from the reseller, even though that price didn't originate at the store.
B)   the items for sale were part of a manufacturer's promotional allowance.
C)   a high price was set for the purpose of establishing a reference for a price reduction.
D)   the items for sale were available at the higher price for less than 30 days.
E)   the items were purchased from the manufacturer at a higher price and the sale was part of a loss-leader promotion.F) B) and E)
G) B) and C)

Question 10

Figure 14-2
-Figure 14-2 above represents the four approaches to selecting an appropriate price level. Box C represents which approach?

Accepted Answer

A)   cost-oriented
B)   profit-oriented
C)   competition-oriented
D)   demand-oriented
E)   results-orientedF) C) and D)
G) B) and C)

Question 11

Cash payments or an extra amount of "free goods" awarded sellers in the channel for undertaking certain advertising or selling activities to promote the product is referred to as a

Accepted Answer

A)   promotional allowance.
B)   promotional quantity discount.
C)   seasonal discount.
D)   promotional purchase inducement.
E)   dynamic pricing policy.F) A) and B)
G) B) and E)

Question 12

Which of these statements about penetration pricing is most accurate?

Accepted Answer

A)   Penetration pricing is a profit-oriented approach to pricing.
B)   Penetration pricing is a cost-oriented pricing method.
C)   Penetration pricing often encourages competitors to enter a market.
D)   Penetration pricing is more effective for a price-sensitive market segment.
E)   Penetration pricing usually precedes a skimming pricing.F) C) and E)
G) B) and C)

Question 13

A discount that is based on the size of an individual purchase order rather than a series of repeat orders is referred to as

Accepted Answer

A)   a cumulative quantity discount.
B)   bundle pricing.
C)   an economic order discount.
D)   a noncumulative quantity discount.
E)   a promotional allowance.F) B) and E)
G) B) and D)

Question 14

When the Swiss watchmaker TAG Heuer quadruped the average price of its watches, its sales volume jumped sevenfold. The likely cause of this volume increase is that

Accepted Answer

A)   the watch market is highly conservative.
B)   economies of scale in production would be substantial.
C)   retailers are not willing to carry new brands of watches in this category.
D)   once the initial price is set, it is nearly impossible to lower the price without alienating early buyers.
E)   the watch category frequently uses prestige pricing, wherein lower prices may result in lower sales.F) B) and D)
G) A) and D)

Question 15

When establishing product-line pricing, the lowest-priced item is typically positioned as

Accepted Answer

A)   the youngest product item in the line.
B)   the smallest selling product item in the line.
C)   the lost-cost item in the line in terms of quality and features.
D)   the profit leader for the rest of the product line.
E)   the traffic builder designed to capture the attention of first-time buyers.F) B) and E)
G) A) and B)

Question 16

Another name for a dynamic pricing policy is

Accepted Answer

A)   target pricing.
B)   fluid pricing.
C)   price lining.
D)   market-based pricing.
E)   a flexible-price policy.F) C) and E)
G) A) and E)

Question 17

A method of pricing where the price the seller quotes includes all transportations costs, and the seller is responsible for any damage that may occur because the seller retains title to the goods until delivered to the buyer, is referred to as

Accepted Answer

A)   destination pricing.
B)   FOB origin pricing.
C)   geographical allowance.
D)   uniform delivered pricing.
E)   transportation allowance.F) C) and E)
G) D) and E)

Question 18

To reward wholesalers and retailers for marketing functions they will perform in the future, a manufacturer often gives ________ discounts.

Accepted Answer

A)   seasonal
B)   cash
C)   trade
D)   quantity
E)   cumulativeF) B) and D)
G) A) and B)

Question 19

The pricing approach that estimates the price that ultimate consumers would be willing to pay for a product; works backward through markups taken by retailers and wholesalers to determine what price to charge wholesalers is referred to as

Accepted Answer

A)   cost-benefit pricing.
B)   cost-plus percentage-of-cost pricing.
C)   target pricing.
D)   cost-plus fixed-fee pricing.
E)   product feature pricing.F) A) and E)
G) All of the above

Question 20

Family Dollar Stores, like Dollar Value Stores and 99¢ Only Stores, use what type of pricing policy?

Accepted Answer

A)   dynamic pricing
B)   customary pricing
C)   flexible pricing
D)   fixed-price
E)   at-market pricingF) C) and E)
G) A) and E)

Exam 14: Arriving at the Final Price

Family Dollar Stores, like Dollar Value Stores and 99¢ Only Stores, use what type of pricing policy?

Correct AnswerverifiedShow Answer

The pricing approach that estimates the price that ultimate consumers would be willing to pay for a product; works backward through markups taken by retailers and wholesalers to determine what price to charge wholesalers is referred to as

Correct AnswerverifiedShow Answer

Lady Marion Seafood, Inc., sells five-pound packages of Alaskan salmon. Assume that its unit variable cost per package is $30 and its fixed cost is $250,000. It wants a target profit of $38,000 based on a volume of 16,000 packages. What should the firm charge for a five-pound package of salmon?

Correct AnswerverifiedShow Answer

A discount that is based on the size of an individual purchase order rather than a series of repeat orders is referred to as

Correct AnswerverifiedShow Answer

Price lining is considered to be a ________ approach to pricing.

Correct AnswerverifiedShow Answer

Figure 14-2 -Figure 14-2 above represents the four approaches to selecting an appropriate price level. Box C represents which approach?

Correct AnswerverifiedShow Answer

Store frequently show items for sale with a price that appears to be reduced. Former price comparisons are deceptive if

Correct AnswerverifiedShow Answer

Figure 14-4 -Figure 14-4 above illustrates which type of pricing approach?

Correct AnswerverifiedShow Answer

Another name for a dynamic pricing policy is

Correct AnswerverifiedShow Answer

When establishing product-line pricing, the lowest-priced item is typically positioned as

Correct AnswerverifiedShow Answer

Setting different prices for products and services in real time in response to supply and demand conditions is referred to as

Correct AnswerverifiedShow Answer

A method of pricing where the price the seller quotes includes all transportations costs, and the seller is responsible for any damage that may occur because the seller retains title to the goods until delivered to the buyer, is referred to as

Correct AnswerverifiedShow Answer

Cash payments or an extra amount of "free goods" awarded sellers in the channel for undertaking certain advertising or selling activities to promote the product is referred to as a

Correct AnswerverifiedShow Answer

The practice of offering a bargain that is conditional on the purchase of other products may exist when a buyer is offered the "1-Cent Sales," the "Buy 1, Get 1 Free," or the "Get 2 for the Price of 1" deal. Such pricing is legal only if

Correct AnswerverifiedShow Answer

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

To reward wholesalers and retailers for marketing functions they will perform in the future, a manufacturer often gives ________ discounts.

Correct AnswerverifiedShow Answer

Summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price is referred to as

Correct AnswerverifiedShow Answer

When the Swiss watchmaker TAG Heuer quadruped the average price of its watches, its sales volume jumped sevenfold. The likely cause of this volume increase is that

Correct AnswerverifiedShow Answer

Setting a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors is referred to as

Correct AnswerverifiedShow Answer

Which of these statements about penetration pricing is most accurate?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified