Question 1

The percentage change in quantity demanded relative to the percentage change in price is referred to as

Accepted Answer

A)   price elasticity of demand.
B)   demand derivative of price.
C)   average demand.
D)   marginal revenue.
E)   derived demand.F) C) and E)
G) A) and B)

Question 2

What factors determine price elasticity of demand?

Accepted Answer

Price elasticity of demand is determined...

Question 3

Mrs. Renfro's, Inc., sells 25 different relishes in 45 states. Mrs. Renfro's chipotle corn salsa is so popular that the company cannot make enough to keep its resellers stocked. Its price of $4.50 for a jar seems just right to consumers who savor its hot and spicy taste. The popularity of hot and spicy food is an example of a ________ that Mrs. Renfro's has taken advantage of to make its product a success.

Accepted Answer

A)   barter factor
B)   demand factor
C)   supply factor
D)   consumer index
E)   macroeconomic environmental factorF) A) and E)
G) None of the above

Question 4

Figure 13-7B
-In the break-even chart in Figure 13-7 above, the triangular area FBE represents the firm's

Accepted Answer

A)   fixed costs.
B)   break-even point.
C)   variable costs.
D)   profit.
E)   total revenue.F) A) and C)
G) None of the above

Question 5

If a McDonald's menu board advertises Mini Meals, a small bundle of items for $3, McDonald's is most likely using which type of pricing strategy?

Accepted Answer

A)   predatory pricing
B)   value pricing
C)   loss-leader pricing
D)   odd-even pricing
E)   barterF) C) and D)
G) B) and E)

Question 6

The ratio of perceived benefits to price is referred to as

Accepted Answer

A)   the price-quality relationship.
B)   customer-value pricing.
C)   value-added pricing.
D)   value analysis.
E)   value.F) A) and E)
G) A) and B)

Question 7

Wilkinson Sword exchanged some of its knives for advertising used to promote its razor blades. This is an example of

Accepted Answer

A)   barter.
B)   reciprocal pricing.
C)   virtual pricing.
D)   balance of payments.
E)   value pricing.F) A) and D)
G) A) and E)

Question 8

Suppose you want to buy a Tesla Model S, an all-electric, zero-emission car that has a 265-mile range and can be recharged in three hours. The Tesla Model S Performance model has a list price of $87,500. However, you want several options (Performance Plus Package, red multicoat armor paint, Tech Package, Sound Studio Package, home charging station, performance wheels, and others)  that will cost $17,500. An extended warranty will add an additional $5,000. However, if you put $50,000 down now and finance the balance over the next year, you will receive a dealer rebate of $5,000 off the list price. The dealer will give you a $7,000 trade-in allowance for your 2014 Honda Civic DX four-door sedan. In addition, you will have to pay a state sales tax of $10,000, an auto registration fee of $1,000 to the state, and a $1,000 destination charge to ship and prep the car. But because the Tesla Model S is an alternative energy vehicle, you qualify for a $2,500 state rebate and a $7,500 federal tax credit! Finally, your total finance charge is $7,000. Applying the price equation, what is your final price for the Tesla Model S?

Accepted Answer

A)   $57,000
B)   $68,000
C)   $87,500
D)   $107,000
E)   $151,000F) B) and E)
G) C) and E)

Question 9

SHAPE magazine is targeted at young women seeking healthier lifestyles. At a price of $3 per copy, 1.25 million copies are sold. If the price per issue is increased to $3.25, only 1 million copies would be sold. Fixed costs are $1 million and unit variable costs are $0.50 per magazine. From the information provided here, what is SHAPE magazine's total revenue obtained at the lower $3 price?

Accepted Answer

A)   $3,750,000
B)   $3,250,000
C)   $3,000,000
D)   $2,125,000
E)   $1,750,000F) A) and B)
G) C) and E)

Question 10

The particular type of competition dramatically influences the range of price competition and, in turn,

Accepted Answer

A)   the nature of product differentiation and extent of advertising.
B)   the nature of product differentiation and requirements for on-hand inventory.
C)   the degree of involvement with each of the organization's stakeholders.
D)   the degree of involvement with both retailers and wholesalers.
E)   the relationship between product lines and product classes.F) None of the above
G) A) and E)

Question 11

How do consumers use price in their assessments of value?

Accepted Answer

From a consumer's standpoint, price is o...

Question 12

Elastic demand exists when

Accepted Answer

A)   a small percentage decrease in price produces a smaller percentage increase in quantity demanded.
B)   a small percentage decrease in price produces a larger percentage increase in quantity demanded.
C)   an increase in price causes a larger increase in quantity demanded.
D)   the quantity demanded remains the same regardless of level of price.
E)   no change in price produces a small percentage change in quantity demanded.F) A) and D)
G) A) and E)

Question 13

When Pizza Hut announced it was going to add 25 percent more toppings to its Meat Lover's line of pizzas without increasing prices, consumers benefited from an increase in what?

Accepted Answer

A)   cost
B)   appearance
C)   value
D)   price
E)   qualityF) C) and D)
G) B) and C)

Question 14

Which of these is true about a pair of $200 designer denim jeans?

Accepted Answer

A)   The manufacturer's labor to make them comprises the largest percentage of the final price, with other channel members clamoring over a mere 10 percent.
B)   Everyone gets a fair cut of the final price; the marketer will be cut off from the customer unless all channel members are profitable.
C)   The specialty retailers that sell them account for only 25 percent of the cost so that the jeans can benefit from demand pull.
D)   The final price is only this high when there is a lack of competition among cotton producers or other suppliers.
E)   The marketer of the designer denim jeans typically is not profitable for products like these.F) None of the above
G) C) and E)

Question 15

Pure monopoly is the competitive market situation where

Accepted Answer

A)   many sellers follow market price for identical, commodity products.
B)   one seller sets the price for a unique product.
C)   few sellers compete, and are sensitive to one another's prices.
D)   many sellers compete on nonprice factors.
E)   one or a few sellers compete solely on nonprice factors.F) B) and D)
G) A) and B)

Question 16

All of these are examples of pricing objectives exceptwhich?

Accepted Answer

A)   market share
B)   survival
C)   unit sales
D)   social responsibility
E)   product obsolescenceF) C) and E)
G) B) and E)

Question 17

Value pricing is

Accepted Answer

A)   the ratio of perceived benefits to price.
B)   the money or other considerations exchanged for the ownership or use of a product or service.
C)   the practice of simultaneously increasing product and service benefits while maintaining or decreasing price.
D)   the ratio of price to perceived benefits.
E)   the list price minus incentives and allowances plus extra fees.F) A) and D)
G) B) and E)

Question 18

Figure 13-4B
-Which of these would most likely account for the shift in the demand curve from D2to D3shown in Figure 13-4B above?

Accepted Answer

A)   The firm increased its prices and consumers perceived the value of the product to be greater.
B)   There were more product substitutes available in the marketplace.
C)   Competitors in the market lowered their prices.
D)   A recession occurred that lowered consumers' incomes.
E)   The product became trendy among members of its target market.F) C) and D)
G) A) and C)

Question 19

The break-even point (BEP)  = [________ ÷ (Unit price − Unit variable cost) ].

Accepted Answer

A)   Total cost
B)   Total expense
C)   Fixed cost
D)   Unit variable cost
E)   Total number of units produced or quantityF) B) and D)
G) C) and D)

Question 20

Suppose you are the owner of a picture frame store and you wish to calculate how many pictures you must sell to cover your fixed and variable costs at a given price. Demand for pictures is strong, so the average price customers are willing to pay for each picture frame is $120. Also, suppose your fixed costs (FC)  total $32,000 (real estate taxes, interest on a bank loan, etc.)  and unit variable cost (UVC)  for a picture frame is $40 (labor, glass, frame, and matting) . What is the quantity of picture frames you will need to sell to break even?

Accepted Answer

A)   200 picture frames
B)   400 picture frames
C)   800 picture frames
D)   1,600 picture frames
E)   2,000 picture framesF) A) and B)
G) A) and C)

Exam 13: Building the Price Foundation

All of these are examples of pricing objectives exceptwhich?

Correct Answer
verified

Pure monopoly is the competitive market situation where

Correct Answer
verified

Value pricing is

Correct Answer
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The break-even point (BEP) = [________ ÷ (Unit price − Unit variable cost) ].

Correct Answer
verified

The percentage change in quantity demanded relative to the percentage change in price is referred to as

Correct Answer
verified

When Pizza Hut announced it was going to add 25 percent more toppings to its Meat Lover's line of pizzas without increasing prices, consumers benefited from an increase in what?

Correct Answer
verified

Figure 13-7B -In the break-even chart in Figure 13-7 above, the triangular area FBE represents the firm's

Correct Answer
verified

Elastic demand exists when

Correct Answer
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The particular type of competition dramatically influences the range of price competition and, in turn,

Correct Answer
verified

Correct Answer
verified

If a McDonald's menu board advertises Mini Meals, a small bundle of items for $3, McDonald's is most likely using which type of pricing strategy?

Correct Answer
verified

How do consumers use price in their assessments of value?

Correct Answer
verified
From a consumer's standpoint, price is o...
View Answer

Figure 13-4B -Which of these would most likely account for the shift in the demand curve from D2to D3shown in Figure 13-4B above?

Correct Answer
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Correct Answer
verified

Wilkinson Sword exchanged some of its knives for advertising used to promote its razor blades. This is an example of

Correct Answer
verified

Which of these is true about a pair of $200 designer denim jeans?

Correct Answer
verified

The ratio of perceived benefits to price is referred to as

Correct Answer
verified

Correct Answer
verified

Correct Answer
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What factors determine price elasticity of demand?

Correct Answer
verified
Price elasticity of demand is determined...
View Answer

Exam 13: Building the Price Foundation

All of these are examples of pricing objectives exceptwhich?

Correct AnswerverifiedShow Answer

Pure monopoly is the competitive market situation where

Correct AnswerverifiedShow Answer

Value pricing is

Correct AnswerverifiedShow Answer

The break-even point (BEP) = [________ ÷ (Unit price − Unit variable cost) ].

Correct AnswerverifiedShow Answer

The percentage change in quantity demanded relative to the percentage change in price is referred to as

Correct AnswerverifiedShow Answer

When Pizza Hut announced it was going to add 25 percent more toppings to its Meat Lover's line of pizzas without increasing prices, consumers benefited from an increase in what?

Correct AnswerverifiedShow Answer

Figure 13-7B -In the break-even chart in Figure 13-7 above, the triangular area FBE represents the firm's

Correct AnswerverifiedShow Answer

Elastic demand exists when

Correct AnswerverifiedShow Answer

The particular type of competition dramatically influences the range of price competition and, in turn,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If a McDonald's menu board advertises Mini Meals, a small bundle of items for $3, McDonald's is most likely using which type of pricing strategy?

Correct AnswerverifiedShow Answer

How do consumers use price in their assessments of value?

Correct AnswerverifiedFrom a consumer's standpoint, price is o...View AnswerShow Answer

Figure 13-4B -Which of these would most likely account for the shift in the demand curve from D2to D3shown in Figure 13-4B above?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Wilkinson Sword exchanged some of its knives for advertising used to promote its razor blades. This is an example of

Correct AnswerverifiedShow Answer

Which of these is true about a pair of $200 designer denim jeans?

Correct AnswerverifiedShow Answer

The ratio of perceived benefits to price is referred to as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What factors determine price elasticity of demand?

Correct AnswerverifiedPrice elasticity of demand is determined...View AnswerShow Answer

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From a consumer's standpoint, price is o...
View Answer

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Price elasticity of demand is determined...
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