Question 1

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

Accepted Answer

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

Question 2

Marketing managers often use break-even analysis to analyze the relationship between total revenue and total cost to determine profitability at various levels of output. What is the break-even formula? Use the formula to calculate how many DVD players a dealer must sell if her fixed costs are $100,000, unit variable costs are $150, and the selling price is $200.

Accepted Answer

The break-even point (BEP) is the quanti...

Question 3

Figure 11-3
-Figure 14-3 above shows a demand curve depicting which pricing approach?

Accepted Answer

A)   prestige pricing
B)   skimming pricing
C)   penetration pricing
D)   price lining
E)   reflexive pricingF) All of the above
G) B) and C)

Question 4

________ is among several pricing practices that are closely scrutinized because of potential unethical or illegal actions.

Accepted Answer

A)   Price fixing
B)   Price discounting
C)   Regional rollbacks
D)   Horizontal bundling.
E)   Delayed payment penaltiesF) A) and B)
G) A) and C)

Question 5

In some cases, penetration pricing may follow ________ after price insensitive customers have already purchased.

Accepted Answer

A)   experience curve
B)   target ROI
C)   odd-even
D)   above market
E)   skimmingF) B) and C)
G) C) and D)

Question 6

Bob Biltmore owns dozens of successful print shops in the Midwest. Biltmore's shops specialize in low-cost, black-and-white copies and feature user-friendly machines consumers can easily operate. In recent months, Biltmore has noticed more competition near his stores. In an attempt to eliminate the competition, Biltmore has decided to charge a very low price for his black-and-white copies, a price so low his competitors will be forced to close. After that, Biltmore plans to raise copy prices. He plans to engage in the illegal and unethical practice of

Accepted Answer

A)   price fixing.
B)   price inflation.
C)   deceptive pricing.
D)   competitive pricing.
E)   predatory pricing.F) A) and E)
G) A) and C)

Question 7

Cost-plus-percentage-of-cost pricing refers to

Accepted Answer

A)   summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at the price.
B)   adding a fixed percentage to the cost of all items in a specific product class.
C)   setting a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors.
D)   setting the price of a product or service by adding a fixed percentage to the total unit cost.
E)   charging different prices to different buyers for goods of like grade and quality.F) A) and C)
G) B) and E)

Question 8

Figure 11-2
-Figure 11-2 above represents the four approaches to selecting an appropriate price level. Box C includes target profit and target return on sales so it represents which approach?

Accepted Answer

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

Question 9

Setting a price to achieve a profit that is a specified percentage of the sales volume is referred to as

Accepted Answer

A)   target return-on-investment pricing.
B)   target return-on-sales pricing.
C)   loss-leader pricing.
D)   target pricing.
E)   standard markup pricing.F) A) and C)
G) A) and B)

Question 10

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

Question 11

Adding a fixed percentage to the cost of all items in a specific product class is referred to as

Accepted Answer

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

Question 12

Skimming pricing is considered to be a ________ approach to pricing.

Accepted Answer

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

Question 13

Factors other than price affect demand. What are they and how do they work?

Accepted Answer

Price is not the complete story in estim...

Question 14

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)   a small percentage decrease in price produces a smaller percentage increase in quantity supplied.F) B) and E)
G) A) and B)

Question 15

The acronym EDLP stands for

Accepted Answer

A)   estimated discount leveling policy.
B)   extended discounts for loss-leader products.
C)   everyday low pricing.
D)   either (free)  delivery or lower prices.
E)   extended discounts in lieu of lower pricing.F) C) and E)
G) A) and B)

Question 16

Estimating a break-even point would occur during which stage of the price-setting process?

Accepted Answer

A)   Defining the scope of the product
B)   Selecting an approximate price level
C)   Setting the list or quoted price
D)   Evaluating the success of the price strategy
E)   Making special adjustments to the list priceF) C) and D)
G) B) and E)

Question 17

The sum of the firm's expenses that change with the quantity of the product that is produced and sold is referred to as

Accepted Answer

A)   fixed cost.
B)   total cost.
C)   marginal cost.
D)   unit cost.
E)   variable cost.F) B) and E)
G) A) and B)

Question 18

Figure 11-6
-The owner of a picture frame store has generated a spreadsheet of several calculations based on different quantity, price, revenue, cost, and profit scenarios shown in Figure 11-6 above. What is the break-even point quantity for her picture frame store?

Accepted Answer

A)   0
B)   400
C)   800
D)   1,200
E)   2,000F) B) and E)
G) B) and C)

Question 19

A trade-in allowance is

Accepted Answer

A)   a noncash exchange of one product for another of equal or greater value.
B)   a cash-back payment when a more expensive item is replaced with a less expensive item.
C)   the return of money based on proof of purchase.
D)   a cash payment to a retailer for extra in-store support or special featuring of the brand.
E)   a price reduction given when a used product is part of the payment on a new product.F) A) and B)
G) A) and C)

Question 20

A critical assumption when using target profit pricing is that

Accepted Answer

A)   a higher average price will not cause the demand for a product to fall.
B)   a higher average price will cause new competitors to join the industry.
C)   a higher average price will be offset by reductions in manufacturing costs.
D)   profit is tied to the current value of the dollar in relation to foreign currencies.
E)   any price increase will be followed quickly by similar moves from all of your competitors.F) B) and E)
G) B) and C)

Exam 11: Pricing Products and Services

Inelastic demand exists when

Correct Answer
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Penetration pricing refers to

Correct Answer
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A trade-in allowance is

Correct Answer
verified

Cost-plus-percentage-of-cost pricing refers to

Correct Answer
verified

________ is among several pricing practices that are closely scrutinized because of potential unethical or illegal actions.

Correct Answer
verified

Factors other than price affect demand. What are they and how do they work?

Correct Answer
verified
Price is not the complete story in estim...
View Answer

Figure 11-6 -The owner of a picture frame store has generated a spreadsheet of several calculations based on different quantity, price, revenue, cost, and profit scenarios shown in Figure 11-6 above. What is the break-even point quantity for her picture frame store?

Correct Answer
verified

Estimating a break-even point would occur during which stage of the price-setting process?

Correct Answer
verified

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

Correct Answer
verified

Setting a price to achieve a profit that is a specified percentage of the sales volume is referred to as

Correct Answer
verified

Figure 11-3 -Figure 14-3 above shows a demand curve depicting which pricing approach?

Correct Answer
verified

The acronym EDLP stands for

Correct Answer
verified

Correct Answer
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The break-even point (BEP) is the quanti...
View Answer

Figure 11-2 -Figure 11-2 above represents the four approaches to selecting an appropriate price level. Box C includes target profit and target return on sales so it represents which approach?

Correct Answer
verified

A critical assumption when using target profit pricing is that

Correct Answer
verified

In some cases, penetration pricing may follow ________ after price insensitive customers have already purchased.

Correct Answer
verified

Skimming pricing is considered to be a ________ approach to pricing.

Correct Answer
verified

Correct Answer
verified

Adding a fixed percentage to the cost of all items in a specific product class is referred to as

Correct Answer
verified

The sum of the firm's expenses that change with the quantity of the product that is produced and sold is referred to as

Correct Answer
verified

Exam 11: Pricing Products and Services

Inelastic demand exists when

Correct AnswerverifiedShow Answer

Penetration pricing refers to

Correct AnswerverifiedShow Answer

A trade-in allowance is

Correct AnswerverifiedShow Answer

Cost-plus-percentage-of-cost pricing refers to

Correct AnswerverifiedShow Answer

________ is among several pricing practices that are closely scrutinized because of potential unethical or illegal actions.

Correct AnswerverifiedShow Answer

Factors other than price affect demand. What are they and how do they work?

Correct AnswerverifiedPrice is not the complete story in estim...View AnswerShow Answer

Figure 11-6 -The owner of a picture frame store has generated a spreadsheet of several calculations based on different quantity, price, revenue, cost, and profit scenarios shown in Figure 11-6 above. What is the break-even point quantity for her picture frame store?

Correct AnswerverifiedShow Answer

Estimating a break-even point would occur during which stage of the price-setting process?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Setting a price to achieve a profit that is a specified percentage of the sales volume is referred to as

Correct AnswerverifiedShow Answer

Figure 11-3 -Figure 14-3 above shows a demand curve depicting which pricing approach?

Correct AnswerverifiedShow Answer

The acronym EDLP stands for

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe break-even point (BEP) is the quanti...View AnswerShow Answer

Figure 11-2 -Figure 11-2 above represents the four approaches to selecting an appropriate price level. Box C includes target profit and target return on sales so it represents which approach?

Correct AnswerverifiedShow Answer

A critical assumption when using target profit pricing is that

Correct AnswerverifiedShow Answer

In some cases, penetration pricing may follow ________ after price insensitive customers have already purchased.

Correct AnswerverifiedShow Answer

Skimming pricing is considered to be a ________ approach to pricing.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Adding a fixed percentage to the cost of all items in a specific product class is referred to as

Correct AnswerverifiedShow Answer

The sum of the firm's expenses that change with the quantity of the product that is produced and sold is referred to as

Correct AnswerverifiedShow Answer

Correct Answer
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Price is not the complete story in estim...
View Answer

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The break-even point (BEP) is the quanti...
View Answer

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