Question 1

Describe the types of competitive markets and give an example of each one.

Accepted Answer

There are four types of competitive mark...

Question 2

Unit variable cost refers to variable cost expressed

Accepted Answer

A)  as the sum of all units sold.
B)  on a per unit basis for a product.
C)  as a percentage of total sales.
D)  as a percentage of fixed costs.
E)  as a percentage of total costs.F) C) and E)
G) B) and C)

Question 3

A major grocery chain pays its baggers a regular hourly wage.The baggers not only pack the groceries,but they also will take customers' groceries to their car,regardless of the weather.The baggers are not permitted to accept tips,even if they are offered.The consumer will experience this as

Accepted Answer

A)  pricing enhancement.
B)  societal pricing.
C)  revenue sharing.
D)  value pricing.
E)  cost-plus pricing.F) D) and E)
G) A) and C)

Question 4

Figure 13-7
 
-In the break-even chart in Figure 13-7 above,the rectangular area EBCD represents the firm's

Accepted Answer

A)  fixed costs.
B)  break-even point.
C)  variable costs.
D)  profit.
E)  total revenue.F) All of the above
G) D) and E)

Question 5

Unit volume as a pricing objective refers to

Accepted Answer

A)  the quantity of products to be produced or sold.
B)  the ratio of price per unit to unit variable cost.
C)  the ratio of production costs to the minimum sales price that would still generate profit.
D)  the total quantity of product sold by a firm relative to the total quantity of product sold by all firms in the industry.
E)  variable cost expressed on a per unit basis for a product.F) A) and E)
G) C) and E)

Question 6

Several pricing objectives relate to a firm's profit.In one known as ________,a company gives up immediate profit in exchange for achieving a higher market share in the hopes of penetrating competitive markets.

Accepted Answer

A)  maximizing current profit
B)  target return
C)  break-even strategy
D)  minimizing risk
E)  managing for long-run profitsF) A) and E)
G) B) and E)

Question 7

Tim Marlow,the owner of The Clock Works,wanted to know how many clocks he must sell in order to cover his fixed cost at a given price.Marlow knew that he had total fixed costs of $20,000 for equipment,taxes,and a bank loan.He also had a unit variable cost of $20 per clock for labor and materials.If the price Marlow charges for each of his clocks is $40,what is his break-even point quantity?

Accepted Answer

A)  100 clocks
B)  334 clocks
C)  500 clocks
D)  1,000 clocks
E)  10,000 clocksF) None of the above
G) C) and D)

Question 8

Occasionally,prices may rise later in the product's life cycle.This is often due to

Accepted Answer

A)  new competitors entering the market.
B)  production economies of scale.
C)  a decrease in the price of raw materials.
D)  nostalgia and fad factors.
E)  the type of competitive market shifts from pure monopoly to pure competition.F) A) and B)
G) A) and C)

Question 9

Each month,the owner of a car wash pays $2,500 in rent,$500 in utilities,$750 interest on the business loan,an insurance premium of $200,and $250 on advertising on local bus routes.A full-service car wash is priced at $10.50.Unit variable costs for the car wash are $7.50.At what level of revenue will the car wash break even?

Accepted Answer

A)  $4,200
B)  $10,500
C)  $14,700
D)  $30,000
E)  $39,900F) B) and C)
G) None of the above

Question 10

Which of the following statements about the product life cycle as a pricing constraint is most accurate?

Accepted Answer

A)  The newer a product is,the higher the price that can usually be charged.
B)  The later in the product life cycle a product is,the higher the price that can usually be charged.
C)  Once a product is considered nostalgic,the price will continue to rise indefinitely.
D)  Fads will generally have only two price points-high and low-but the values of those price points usually will be within 10 percent of each other.
E)  Prices should not be changed until a product reaches its maturity stage.F) All of the above
G) A) and E)

Question 11

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

Question 12

While consumer tastes and price and availability of similar products determine what consumers want to buy,consumer income determines

Accepted Answer

A)  where they buy.
B)  the degree of brand loyalty.
C)  the degree of repeat buys.
D)  what they can buy.
E)  their desire to buy.F) A) and E)
G) B) and C)

Question 13

Forever Quilting is a small company that makes quilting kits priced at $120 each.There is no quantity discount.The costs of the materials that go into each kit total $45.It costs $5 in labor to assemble a kit.The company has monthly expenses of $1,000 for rent and insurance,$200 for heat and electricity,$500 for advertising,and $4,500 for the monthly salary of its owner.Last month the company sold 150 kits.Forever Quilting's total revenue for the month was

Accepted Answer

A)  $4,300.
B)  $6,200.
C)  $7,500.
D)  $10,500.
E)  $18,000.F) A) and E)
G) A) and D)

Question 14

An oligopoly is a competitive market situation in which

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 few sellers compete solely on nonprice factors.F) A) and D)
G) All of the above

Question 15

Fixed cost refers to

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

Question 16

Distinguish between elastic demand and inelastic demand.

Accepted Answer

Elastic demand exists when a 1 percent d...

Question 17

How do consumers use price in their assessments of value?

Accepted Answer

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

Exam 13: Building the Price Foundation

Which of the following statements about the product life cycle as a pricing constraint is most accurate?

Correct Answer
verified

While consumer tastes and price and availability of similar products determine what consumers want to buy,consumer income determines

Correct Answer
verified

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

Correct Answer
verified

Figure 13-7 -In the break-even chart in Figure 13-7 above,the rectangular area EBCD represents the firm's

Correct Answer
verified

Correct Answer
verified

A major grocery chain pays its baggers a regular hourly wage.The baggers not only pack the groceries,but they also will take customers' groceries to their car,regardless of the weather.The baggers are not permitted to accept tips,even if they are offered.The consumer will experience this as

Correct Answer
verified

Correct Answer
verified

How do consumers use price in their assessments of value?

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

Describe the types of competitive markets and give an example of each one.

Correct Answer
verified
There are four types of competitive mark...
View Answer

Unit variable cost refers to variable cost expressed

Correct Answer
verified

Correct Answer
verified

Unit volume as a pricing objective refers to

Correct Answer
verified

An oligopoly is a competitive market situation in which

Correct Answer
verified

Several pricing objectives relate to a firm's profit.In one known as ________,a company gives up immediate profit in exchange for achieving a higher market share in the hopes of penetrating competitive markets.

Correct Answer
verified

Distinguish between elastic demand and inelastic demand.

Correct Answer
verified
Elastic demand exists when a 1 percent d...
View Answer

Occasionally,prices may rise later in the product's life cycle.This is often due to

Correct Answer
verified

Fixed cost refers to

Correct Answer
verified

Exam 13: Building the Price Foundation

Which of the following statements about the product life cycle as a pricing constraint is most accurate?

Correct AnswerverifiedShow Answer

While consumer tastes and price and availability of similar products determine what consumers want to buy,consumer income determines

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 13-7 -In the break-even chart in Figure 13-7 above,the rectangular area EBCD represents the firm's

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A major grocery chain pays its baggers a regular hourly wage.The baggers not only pack the groceries,but they also will take customers' groceries to their car,regardless of the weather.The baggers are not permitted to accept tips,even if they are offered.The consumer will experience this as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

How do consumers use price in their assessments of value?

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

Describe the types of competitive markets and give an example of each one.

Correct AnswerverifiedThere are four types of competitive mark...View AnswerShow Answer

Unit variable cost refers to variable cost expressed

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Unit volume as a pricing objective refers to

Correct AnswerverifiedShow Answer

An oligopoly is a competitive market situation in which

Correct AnswerverifiedShow Answer

Several pricing objectives relate to a firm's profit.In one known as ________,a company gives up immediate profit in exchange for achieving a higher market share in the hopes of penetrating competitive markets.

Correct AnswerverifiedShow Answer

Distinguish between elastic demand and inelastic demand.

Correct AnswerverifiedElastic demand exists when a 1 percent d...View AnswerShow Answer

Occasionally,prices may rise later in the product's life cycle.This is often due to

Correct AnswerverifiedShow Answer

Fixed cost refers to

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

Correct Answer
verified
There are four types of competitive mark...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Elastic demand exists when a 1 percent d...
View Answer

Correct Answer
verified

Correct Answer
verified