Question 1

The prices for all furniture sold at American Furniture Warehouse end in $9.99,such as $599.99,$899.99,etc.American Furniture Warehouse uses

Accepted Answer

A)  odd-even pricing.
B)  dynamic pricing.
C)  price lining.
D)  bundle pricing.
E)  product-line pricing.F) A) and B)
G) D) and E)

Question 2

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

Accepted Answer

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

Question 3

The retail price of fax machines has decreased from over $10,000 in the early 1970s to less than $100 today.This is due in large part to

Accepted Answer

A)  skimming pricing.
B)  prestige pricing.
C)  odd-even pricing.
D)  experience curve pricing.
E)  customary pricing.F) C) and D)
G) None of the above

Question 4

Setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it is referred to as

Accepted Answer

A)  skimming pricing.
B)  status pricing.
C)  price lining.
D)  value pricing.
E)  prestige pricing.F) A) and C)
G) A) and D)

Question 5

Everyday low pricing refers to

Accepted Answer

A)  the pricing strategy of "extreme value" stores to maintain high price-quality images for the products they sell.
B)  the pricing strategy of starting a product at standard list price and then lowering the price by a certain percentage until it is sold.
C)  short-term price reductions when consumer demand takes a significant and unexpected dip.
D)  the practice of replacing promotional allowances with lower manufacturer list prices.
E)  a form of predatory pricing used solely for the purpose of undercutting competitors' prices.F) C) and D)
G) B) and C)

Question 6

Supermarket managers use standard markup pricing because it is particularly suited to situations when

Accepted Answer

A)  there is a large number of products and estimating the demand for each would be difficult and time consuming.
B)  there is a large number of product lines,all with basically the same product attributes.
C)  there is a specific profit goal that needs to be achieved.
D)  there is a policy of selling every item in a product line at the same price regardless of the product class.
E)  the products are perishable or seasonal.F) A) and E)
G) A) and D)

Question 7

Delta Air Lines offers vacation packages that include airfare,car rental,and lodging.Delta Air is using a(n) ________ pricing strategy.

Accepted Answer

A)  penetration
B)  prestige
C)  bundle
D)  odd-even
E)  standard markupF) B) and C)
G) C) and D)

Question 8

List four of the eight demand-oriented approaches to selecting an approximate price level and define what they are.

Accepted Answer

Demand-oriented approaches are (1)skimmi...

Question 9

Demand-oriented approaches weigh factors that underlie expected ________ more heavily than such factors as cost,profit,and competition when selecting a price level.

Accepted Answer

A)  total revenue
B)  stakeholder concerns
C)  prevailing prices
D)  product substitutes
E)  customer tastesF) A) and B)
G) All of the above

Question 10

When the Swiss watchmaker TAG Heuer quadruped the average price of its watches,its sales volume jumped sevenfold.The likely cause of this volume increase is that

Accepted Answer

A)  the watch market is highly conservative.
B)  economies of scale in production would be substantial.
C)  retailers are not willing to carry new brands of watches in this category.
D)  once the initial price is set,it is nearly impossible to lower the price without alienating early buyers.
E)  the watch category frequently uses prestige pricing,wherein lower prices may result in lower sales.F) B) and D)
G) A) and C)

Question 11

What type of discount would Toro,a domestic yard machinery company,most likely offer its channel members to carry and sell its riding lawn mowers during the winter?

Accepted Answer

A)  noncumulative discounts
B)  cumulative discounts
C)  functional discounts
D)  seasonal discounts
E)  trade discountsF) A) and C)
G) B) and D)

Question 12

A glassblowing studio makes fine pieces of art glass.It has decided on a retail list price of $2,000 for one of its vases.They sell only through wholesalers and retailers who receive 50/10 terms.How much will the studio receive from selling this vase?

Accepted Answer

A)  $2,000
B)  $1,000
C)  $900
D)  $800
E)  $100F) A) and B)
G) All of the above

Question 13

Which of the following is the step in setting a final price for a product that occurs immediately after determining cost,volume,and profit relationships?

Accepted Answer

A)  set list or quoted price
B)  select an approximate price level
C)  scan competitors for prices of similar products or services
D)  estimate demand and revenue
E)  identify pricing objectives and constraintsF) D) and E)
G) B) and D)

Question 14

Discounts that are designed to encourage repeat buying by a single customer over a given time period,such as a year,are referred to as

Accepted Answer

A)  promotional allowances.
B)  cumulative quantity discounts.
C)  cash discounts.
D)  functional discounts.
E)  noncumulative quantity discounts.F) A) and E)
G) D) and E)

Question 15

Reductions from list or quoted prices to buyers for performing some activity are referred to as

Accepted Answer

A)  allowances.
B)  subsidies.
C)  remittances.
D)  noncumulative deductions.
E)  list price deductions.F) A) and D)
G) None of the above

Question 16

The Brazilian government wants to build a global positioning satellite (GPS) system.The satellite manufacturer will receive a mutually agreed-on profit over and above all costs associated with the project.The pricing approach the satellite manufacturer uses is called

Accepted Answer

A)  standard markup pricing.
B)  experience curve pricing.
C)  cost-plus-percentage-of-cost pricing.
D)  cost-plus-fixed-fee pricing.
E)  bundle pricing.F) B) and E)
G) A) and D)

Question 17

What pricing method is used because it establishes a benchmark to show how much of a firm's effort is needed to achieve a certain profit?

Accepted Answer

A)  experience curve pricing
B)  target return-on-sales pricing
C)  standard markup pricing
D)  target profit pricing
E)  loss-leader pricingF) All of the above
G) A) and D)

Question 18

What is critical when using target profit pricing?

Accepted Answer

A)  demand that is insensitive to price over the range being considered
B)  a higher-than-average price compared to competitors
C)  a low potential for currency exchange rates to change
D)  a lower-than-average price compared to competitors
E)  a new or innovative productF) C) and D)
G) B) and C)

Question 19

What type of discount to resellers is based in part on where they are in the channel?

Accepted Answer

A)  seasonal discounts
B)  trade discounts
C)  cash discounts
D)  promotional allowances
E)  trade-in allowancesF) A) and D)
G) None of the above

Question 20

Figure 14-2
 
-Figure 14-2 above represents the four approaches to selecting an appropriate price level.Box D represents which approach?

Accepted Answer

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

Exam 14: Arriving at the Final Price

Setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it is referred to as

Correct AnswerverifiedShow Answer

What type of discount to resellers is based in part on where they are in the channel?

Correct AnswerverifiedShow Answer

What pricing method is used because it establishes a benchmark to show how much of a firm's effort is needed to achieve a certain profit?

Correct AnswerverifiedShow Answer

A glassblowing studio makes fine pieces of art glass.It has decided on a retail list price of $2,000 for one of its vases.They sell only through wholesalers and retailers who receive 50/10 terms.How much will the studio receive from selling this vase?

Correct AnswerverifiedShow Answer

Demand-oriented approaches weigh factors that underlie expected ________ more heavily than such factors as cost,profit,and competition when selecting a price level.

Correct AnswerverifiedShow Answer

The prices for all furniture sold at American Furniture Warehouse end in $9.99,such as $599.99,$899.99,etc.American Furniture Warehouse uses

Correct AnswerverifiedShow Answer

The retail price of fax machines has decreased from over $10,000 in the early 1970s to less than $100 today.This is due in large part to

Correct AnswerverifiedShow Answer

Discounts that are designed to encourage repeat buying by a single customer over a given time period,such as a year,are referred to as

Correct AnswerverifiedShow Answer

Figure 14-2 -Figure 14-2 above represents the four approaches to selecting an appropriate price level.Box D represents which approach?

Correct AnswerverifiedShow Answer

Delta Air Lines offers vacation packages that include airfare,car rental,and lodging.Delta Air is using a(n) ________ pricing strategy.

Correct AnswerverifiedShow Answer

Everyday low pricing refers to

Correct AnswerverifiedShow Answer

What is critical when using target profit pricing?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Supermarket managers use standard markup pricing because it is particularly suited to situations when

Correct AnswerverifiedShow Answer

Reductions from list or quoted prices to buyers for performing some activity are referred to as

Correct AnswerverifiedShow Answer

List four of the eight demand-oriented approaches to selecting an approximate price level and define what they are.

Correct AnswerverifiedDemand-oriented approaches are (1)skimmi...View AnswerShow Answer

Which of the following is the step in setting a final price for a product that occurs immediately after determining cost,volume,and profit relationships?

Correct AnswerverifiedShow Answer

The Brazilian government wants to build a global positioning satellite (GPS) system.The satellite manufacturer will receive a mutually agreed-on profit over and above all costs associated with the project.The pricing approach the satellite manufacturer uses is called

Correct AnswerverifiedShow Answer

When the Swiss watchmaker TAG Heuer quadruped the average price of its watches,its sales volume jumped sevenfold.The likely cause of this volume increase is that

Correct AnswerverifiedShow Answer

What type of discount would Toro,a domestic yard machinery company,most likely offer its channel members to carry and sell its riding lawn mowers during the winter?

Correct AnswerverifiedShow Answer

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Demand-oriented approaches are (1)skimmi...
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