Question 1

Setting an annual target of a specific dollar volume of profit is referred to as

Accepted Answer

A)   target profit pricing.
B)   target return-on-investment pricing.
C)   loss-leader pricing.
D)   at-, above-, or below-market pricing.
E)   yield management pricing.F) A) and B)
G) A) and E)

Question 2

For the sake of simplicity and by convention, price elasticity figures are shown as

Accepted Answer

A)   positive numbers (0.64, 1.25, etc.) .
B)   negative numbers (−0.64, −1.25, etc.) .
C)   Greek letters (∑, ∏, etc.) .
D)   Roman numerals (I, V, X, etc.) .
E)   English consonants (P, Q, R, etc.) .F) A) and B)
G) A) and D)

Question 3

Pricing constraints are

Accepted Answer

A)   barriers that must be overcome in order to set pricing objectives.
B)   competitive pricing advantages one firm has over another.
C)   different pricing strategies for each of the firm's products.
D)   factors that limit the range of prices a firm may set.
E)   barriers to entry a firm faces when launching a new product.F) C) and E)
G) A) and E)

Question 4

When Hallmark cards introduced a line of 99-cent cards (about half the price of the previously least expensive cards it sold) , the greeting card company was trying to appeal to a mass market that was price-sensitive. Hallmark was using a(n)  ________ pricing strategy.

Accepted Answer

A)   prestige
B)   skimming
C)   target ROI
D)   penetration
E)   experience-curveF) A) and E)
G) A) and D)

Question 5

In order to deliver a product that the average consumer can afford, VIZIO

Accepted Answer

A)   handles product design and marketing in the United States and relies on contract manufacturers in other countries to build the product.
B)   uses mass customization in other countries and then ships the HDTVs to the United States.
C)   purchased a small company in China to distribute its products under the VIZIO name.
D)   purchased a small company in Japan to distribute its products under the VIZIO name.
E)   relies solely on recycled materials to build high-quality, no-frills products.F) B) and C)
G) B) and E)

Question 6

What is the difference between fixed costs and variable costs?

Accepted Answer

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

Question 7

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 B)
G) A) and C)

Question 8

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) B) and E)
G) B) and D)

Question 9

Which of the following is a typical example of a variable cost?

Accepted Answer

A)   shipping costs
B)   rent on a building
C)   executive salaries
D)   insurance premiums
E)   leases on delivery trucksF) C) and D)
G) C) and E)

Question 10

All of the following statements about standard markup pricing are true except which?

Accepted Answer

A)   High-volume products usually have smaller markups than do low-volume products.
B)   The percentage markup depends on the type of retail store and the product involved.
C)   Markups must cover all expenses of the store, pay for overhead costs, and contribute something to profits.
D)   The method involves summing the total unit cost of providing a product or service and adding a specific amount.
E)   Supermarket managers use this method since they have such a large number of products that estimating the demand for each product as a means of setting price is impossible.F) All of the above
G) C) and D)

Question 11

The manufacturer of a new kind of fat-free ice cream that has the consistency and taste of regular ice cream is thinking of using a penetration pricing strategy for its new product. Which of the following conditions would argue against using a penetration pricing strategy for the tasty, fat-free ice cream?

Accepted Answer

A)   The ice cream market is highly elastic.
B)   A large portion of the market has inelastic demand for ice cream over a broad range of prices.
C)   Economies of scale in production would be substantial.
D)   Retailers are not willing to pay for new brands of premium ice cream in the already overcrowded category.
E)   Once the initial price is set, it is nearly impossible to lower prices without alienating buyers.F) A) and B)
G) A) and E)

Question 12

In some cases, penetration pricing may follow skimming pricing. The skimming pricing would help ________ and the penetration pricing would help ________.

Accepted Answer

A)   increase market share; attract price-insensitive customers
B)   attract price-sensitive customers; increase market share
C)   recoup initial research and development costs; increase market share
D)   recoup initial research and development costs; improve firm reputation
E)   increase market share; attract price insensitive customersF) B) and C)
G) C) and E)

Question 13

According to the price equation, final price equals ________ minus allowances plus extra fees.

Accepted Answer

A)   salaries
B)   the list price
C)   profits
D)   trade-ins
E)   taxesF) A) and E)
G) A) and D)

Question 14

Southern gardeners normally pay $5 for a two-cubic-foot bag of pine bark mulch that they buy at their local gardening-supply and home-improvement stores to keep the weeds down in their gardens. If the price being charged by a retailer is not within a narrow range that gardeners feel is appropriate, they will use substitutions-newspaper, grass clippings, or some other kind of covering. When pricing pine bark mulch, a garden-supply or home-improvement retailer should use

Accepted Answer

A)   customary pricing.
B)   at-market pricing.
C)   loss-leader pricing.
D)   penetration pricing.
E)   bundle pricing.F) A) and D)
G) B) and C)

Question 15

Bundle pricing is considered to be a ________ pricing practice.

Accepted Answer

A)   demand-oriented
B)   cost-oriented
C)   profit-oriented
D)   competition-oriented
E)   product line-orientedF) C) and E)
G) None of the above

Question 16

Factors that limit the range of prices a firm may set are referred to as

Accepted Answer

A)   pricing restraints.
B)   pricing constraints.
C)   demand factors.
D)   pricing barriers.
E)   pricing restrictions.F) All of the above
G) A) and D)

Question 17

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 E)
G) B) and D)

Question 18

Using ________, many retailers deliberately sell products below their normal prices (and sometimes below cost)  to attract attention and additional store traffic.

Accepted Answer

A)   customary pricing
B)   below-market pricing
C)   prestige pricing
D)   penetration pricing
E)   loss-leader pricingF) D) and E)
G) A) and E)

Question 19

According to the textbook, Revlon cosmetics uses ________ pricing.

Accepted Answer

A)   above-market
B)   at-market
C)   below-market
D)   prestige
E)   everyday lowF) None of the above
G) A) and B)

Question 20

The purpose of a cash discount is to

Accepted Answer

A)   reward retailers for making large quantity purchases.
B)   encourage purchasing items during periods of low demand.
C)   prevent competitors from obtaining shelf space.
D)   counteract the introduction of a new product by a competitor.
E)   encourage retailers to pay their bills promptly.F) A) and B)
G) A) and C)

Exam 11: Pricing Products and Services

Bundle pricing is considered to be a ________ pricing practice.

Correct Answer
verified

Using ________, many retailers deliberately sell products below their normal prices (and sometimes below cost) to attract attention and additional store traffic.

Correct Answer
verified

According to the textbook, Revlon cosmetics uses ________ pricing.

Correct Answer
verified

Factors that limit the range of prices a firm may set are referred to as

Correct Answer
verified

Correct Answer
verified

All of the following statements about standard markup pricing are true except which?

Correct Answer
verified

According to the price equation, final price equals ________ minus allowances plus extra fees.

Correct Answer
verified

Setting an annual target of a specific dollar volume of profit is referred to as

Correct Answer
verified

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

Correct Answer
verified

For the sake of simplicity and by convention, price elasticity figures are shown as

Correct Answer
verified

In order to deliver a product that the average consumer can afford, VIZIO

Correct Answer
verified

Pricing constraints are

Correct Answer
verified

In some cases, penetration pricing may follow skimming pricing. The skimming pricing would help and the penetration pricing would help .

Correct Answer
verified

What is the difference between fixed costs and variable costs?

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

The purpose of a cash discount is to

Correct Answer
verified

Value-pricing is

Correct Answer
verified

Correct Answer
verified

Which of the following is a typical example of a 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 Hallmark cards introduced a line of 99-cent cards (about half the price of the previously least expensive cards it sold) , the greeting card company was trying to appeal to a mass market that was price-sensitive. Hallmark was using a(n) ________ pricing strategy.

Correct Answer
verified

Exam 11: Pricing Products and Services

Bundle pricing is considered to be a ________ pricing practice.

Correct AnswerverifiedShow Answer

Using ________, many retailers deliberately sell products below their normal prices (and sometimes below cost) to attract attention and additional store traffic.

Correct AnswerverifiedShow Answer

According to the textbook, Revlon cosmetics uses ________ pricing.

Correct AnswerverifiedShow Answer

Factors that limit the range of prices a firm may set are referred to as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

All of the following statements about standard markup pricing are true except which?

Correct AnswerverifiedShow Answer

According to the price equation, final price equals ________ minus allowances plus extra fees.

Correct AnswerverifiedShow Answer

Setting an annual target of a specific dollar volume of profit is referred to as

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

For the sake of simplicity and by convention, price elasticity figures are shown as

Correct AnswerverifiedShow Answer

In order to deliver a product that the average consumer can afford, VIZIO

Correct AnswerverifiedShow Answer

Pricing constraints are

Correct AnswerverifiedShow Answer

In some cases, penetration pricing may follow skimming pricing. The skimming pricing would help ________ and the penetration pricing would help ________.

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

The purpose of a cash discount is to

Correct AnswerverifiedShow Answer

Value-pricing is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is a typical example of a 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 Hallmark cards introduced a line of 99-cent cards (about half the price of the previously least expensive cards it sold) , the greeting card company was trying to appeal to a mass market that was price-sensitive. Hallmark was using a(n) ________ pricing strategy.

Correct AnswerverifiedShow Answer

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Correct Answer
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In some cases, penetration pricing may follow skimming pricing. The skimming pricing would help and the penetration pricing would help .

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
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Correct Answer
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