Question 1

The price-setting process identifies pricing objectives and constraints. Describe the reasons these objectives may change and give examples of objectives a firm may set.

Accepted Answer

Pricing objectives involve specifying th...

Question 2

The first Apple iPhone was introduced in 2007 at an initial price of $600. People waited in line overnight so they could be one of the first to own this unique smartphone. Which pricing strategy did Apple use to help recoup its costs for developing the smartphone?

Accepted Answer

A)   penetration pricing
B)   experience curve pricing
C)   customary pricing
D)   skimming pricing
E)   target pricingF) C) and E)
G) C) and D)

Question 3

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) D) and E)
G) C) and E)

Question 4

RadioShack, an electronics retail chain, couldn't compete with the prices offered by other retailers. The company enacted price-matching programs and promoted large discounts on its merchandise to raise cash and hopefully stave off bankruptcy. The best pricing objective at this point for RadioShack most likely was

Accepted Answer

A)   profit.
B)   market share.
C)   unit volume.
D)   survival.
E)   social responsibility.F) A) and E)
G) None of the above

Question 5

The most commonly used pricing method for business products is

Accepted Answer

A)   target return on investment.
B)   customary.
C)   standard markup.
D)   target profit.
E)   cost-plus pricing.F) A) and B)
G) D) and E)

Question 6

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) B) and C)
G) A) and C)

Question 7

Standard markup pricing is considered to be a ________ approach to pricing.

Accepted Answer

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

Question 8

Fixed cost is

Accepted Answer

A)   the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold.
B)   the total expense incurred by a firm in producing and marketing a product, which equals the sum of overhead cost and variable cost.
C)   the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold.
D)   the average amount of money received for selling one unit of a product or simply the price of that unit.
E)   the change in expenses that results from producing and marketing one additional unit of a product.F) A) and C)
G) B) and D)

Question 9

Your local instant photocopying service charges 10 cents a copy up to 25 copies, 9 cents a copy for 26 to 99 copies, and 8 cents a copy for 100 copies or more. What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

Accepted Answer

A)   experience curve pricing
B)   loss-leader pricing
C)   a quantity discount
D)   a promotional discount
E)   everyday low pricingF) C) and D)
G) B) and E)

Question 10

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) A) and C)
G) C) and E)

Question 11

Susan hired an attorney to represent her in a court case involving an auto accident. The attorney charged her a $2,000 retainer fee for the services. Terry needed a haircut; the local stylist charged him $22 for his services. Aaron mowed his neighbor's lawn; in exchange, the neighbor repaired his gutters. The attorney fees, the $12 charged by the hair stylist, and the exchange of lawn mowing for gutter repair are all examples of

Accepted Answer

A)   premiums.
B)   barter.
C)   the profit motive.
D)   price.
E)   outlays.F) C) and E)
G) B) and C)

Question 12

According to the profit equation, profit equals

Accepted Answer

A)   Total cost + Total revenue.
B)   Total revenue − Total cost.
C)   Marginal revenue − Marginal cost.
D)   Price × Quantity.
E)   Total revenue + Marginal cost.F) All of the above
G) B) and E)

Question 13

When Amazon introduced the latest Kindle Fire tablet at $49.99 and the average price of competitive models was $323, Amazon was using a ________ pricing strategy.

Accepted Answer

A)   skimming
B)   price lining
C)   BOGO
D)   penetration
E)   loss-leaderF) A) and D)
G) C) and E)

Question 14

When Dell sells various laptops, it also preinstalls Microsoft Office and other software that customers order at a discount before the laptop is shipped. This is an example of

Accepted Answer

A)   price lining.
B)   product-line pricing.
C)   bundle pricing.
D)   customary pricing.
E)   prestige pricing.F) A) and D)
G) A) and C)

Question 15

Two or more competitors explicitly or implicitly setting prices is referred to as

Accepted Answer

A)   competitive collusion.
B)   vertical price fixing.
C)   horizontal price fixing.
D)   lateral price fixing.
E)   price cooperation.F) C) and E)
G) None of the above

Question 16

Tendollars.com offers thousands of gifts, all priced at $10. This is an example of

Accepted Answer

A)   a skimming pricing approach.
B)   a loss-leader pricing approach.
C)   a one-price policy.
D)   a penetration pricing approach.
E)   an everyday low pricing approach.F) D) and E)
G) A) and E)

Question 17

Mrs. Renfro's, Inc., sells 25 different relishes in 45 different states. Its Chipotle Corn Salsa is so popular that the company struggles to keep its resellers stocked. At $4.50 a jar, its price seems just right to consumers who savor its hot and spicy taste. The popularity of spicy food is an example of a ________ on which Mrs. Renfro's has capitalized.

Accepted Answer

A)   barter factor
B)   demand factor
C)   supply factor
D)   consumer index
E)   macroeconomic environmental factorF) A) and B)
G) A) and C)

Question 18

All of the following are competition-oriented approaches to selecting an approximate price level except which?

Accepted Answer

A)   loss-leader pricing
B)   customary pricing
C)   above-market pricing
D)   odd-even pricing
E)   at-market pricingF) D) and E)
G) B) and E)

Question 19

Explain why odd-even pricing may be successful.

Accepted Answer

Odd-even pricing presumes that...

Question 20

To encourage buyers to stock inventory earlier than their normal demand would require, manufacturers often use

Accepted Answer

A)   quantity discounts.
B)   quarterly discounts.
C)   seasonal discounts.
D)   trade discounts.
E)   functional discounts.F) A) and D)
G) A) and B)

Exam 11: Pricing Products and Services

Your local instant photocopying service charges 10 cents a copy up to 25 copies, 9 cents a copy for 26 to 99 copies, and 8 cents a copy for 100 copies or more. What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

Correct Answer
verified

The price-setting process identifies pricing objectives and constraints. Describe the reasons these objectives may change and give examples of objectives a firm may set.

Correct Answer
verified
Pricing objectives involve specifying th...
View Answer

Standard markup pricing is considered to be a ________ approach to pricing.

Correct Answer
verified

Explain why odd-even pricing may be successful.

Correct Answer
verified
Odd-even pricing presumes that...
View Answer

Correct Answer
verified

Correct Answer
verified

When Dell sells various laptops, it also preinstalls Microsoft Office and other software that customers order at a discount before the laptop is shipped. This is an example of

Correct Answer
verified

Two or more competitors explicitly or implicitly setting prices is referred to as

Correct Answer
verified

To encourage buyers to stock inventory earlier than their normal demand would require, manufacturers often use

Correct Answer
verified

The first Apple iPhone was introduced in 2007 at an initial price of $600. People waited in line overnight so they could be one of the first to own this unique smartphone. Which pricing strategy did Apple use to help recoup its costs for developing the smartphone?

Correct Answer
verified

All of the following are competition-oriented approaches to selecting an approximate price level except which?

Correct Answer
verified

The most commonly used pricing method for business products is

Correct Answer
verified

When Amazon introduced the latest Kindle Fire tablet at $49.99 and the average price of competitive models was $323, Amazon was using a ________ pricing strategy.

Correct Answer
verified

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 Answer
verified

Fixed cost is

Correct Answer
verified

Tendollars.com offers thousands of gifts, all priced at $10. This is an example of

Correct Answer
verified

According to the profit equation, profit equals

Correct Answer
verified

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 Answer
verified

Correct Answer
verified

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 Answer
verified

Exam 11: Pricing Products and Services

Your local instant photocopying service charges 10 cents a copy up to 25 copies, 9 cents a copy for 26 to 99 copies, and 8 cents a copy for 100 copies or more. What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

Correct AnswerverifiedShow Answer

The price-setting process identifies pricing objectives and constraints. Describe the reasons these objectives may change and give examples of objectives a firm may set.

Correct AnswerverifiedPricing objectives involve specifying th...View AnswerShow Answer

Standard markup pricing is considered to be a ________ approach to pricing.

Correct AnswerverifiedShow Answer

Explain why odd-even pricing may be successful.

Correct AnswerverifiedOdd-even pricing presumes that...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When Dell sells various laptops, it also preinstalls Microsoft Office and other software that customers order at a discount before the laptop is shipped. This is an example of

Correct AnswerverifiedShow Answer

Two or more competitors explicitly or implicitly setting prices is referred to as

Correct AnswerverifiedShow Answer

To encourage buyers to stock inventory earlier than their normal demand would require, manufacturers often use

Correct AnswerverifiedShow Answer

The first Apple iPhone was introduced in 2007 at an initial price of $600. People waited in line overnight so they could be one of the first to own this unique smartphone. Which pricing strategy did Apple use to help recoup its costs for developing the smartphone?

Correct AnswerverifiedShow Answer

All of the following are competition-oriented approaches to selecting an approximate price level except which?

Correct AnswerverifiedShow Answer

The most commonly used pricing method for business products is

Correct AnswerverifiedShow Answer

When Amazon introduced the latest Kindle Fire tablet at $49.99 and the average price of competitive models was $323, Amazon was using a ________ pricing strategy.

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

Fixed cost is

Correct AnswerverifiedShow Answer

Tendollars.com offers thousands of gifts, all priced at $10. This is an example of

Correct AnswerverifiedShow Answer

According to the profit equation, profit equals

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

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

Correct Answer
verified

Correct Answer
verified
Pricing objectives involve specifying th...
View Answer

Correct Answer
verified

Correct Answer
verified
Odd-even pricing presumes that...
View 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
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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