Question 1

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 E)
G) A) and B)

Question 2

Selecting one or more geographical locations from which the list price for products plus freight expenses are charged to the buyer is referred to as

Accepted Answer

A)  FOB origin pricing.
B)  basing-point pricing.
C)  single-zone pricing.
D)  multiple-zone pricing.
E)  freight absorption pricing.F) B) and E)
G) D) and E)

Question 3

All of the following are demand-oriented approaches to selecting an approximate price level except

Accepted Answer

A)  odd-even.
B)  yield management.
C)  customary.
D)  bundle.
E)  prestige.F) All of the above
G) A) and B)

Question 4

If the cash discount terms for a $500 purchase are 4/10 net 30, the number 4 refers to

Accepted Answer

A)  the percentage markup on the product.
B)  the percentage discount if the bill is paid within 10 days.
C)  the percentage increase in price if the bill is not paid within 10 days.
D)  the discount in dollars per unit if the order is paid on time within 30 days.
E)  the penalty in dollars if the bill is not paid within 10 days.F) A) and D)
G) B) and C)

Question 5

The Consumer Goods Pricing Act, the Sherman Act, the Federal Trade Commission Act, and the Robinson-Patman Act all address different aspects of deceptive pricing. Select one example for each act and explain which aspects of the practice would be considered illegal.

Accepted Answer

The Consumer Goods Pricing Act considers...

Question 6

After offering a promotional allowance, the price of a product returns to its regular price level. When this happens, the retail store's gross margin on that product __________ on those items that were bought with the allowance but not sold during the price special promotion.

Accepted Answer

A)  decreases substantially
B)  increases substantially
C)  remains the same
D)  fluctuates wildly
E)  vanishesF) A) and B)
G) B) and C)

Question 7

Explain predatory pricing.

Accepted Answer

Predatory pricing is the practice of cha...

Question 8

What is it called when a manufacturer offers discounts to resellers in the marketing channel on the basis of where they are in the channel?

Accepted Answer

A)  seasonal discounts
B)  trade discounts
C)  cash discounts
D)  promotional allowances
E)  trade-in allowancesF) All of the above
G) D) and E)

Question 9

While __________ often changes price based upon color or style, __________ often changes prices based on time, day, week, or season.

Accepted Answer

A)  prestige pricing; skimming pricing
B)  yield management pricing; bundle pricing
C)  price lining; yield management pricing
D)  target pricing; target return on investment pricing
E)  bundle pricing; standard markup pricingF) B) and C)
G) C) and E)

Question 10

If the terms of the trade discount are listed 20/10/5, the number "5" represents

Accepted Answer

A)  5 percent of the suggested retail price that is available to the retailer to cover costs and provide a profit.
B)  5 percent of the suggested retail price that is available to the wholesaler to cover costs and provide a profit.
C)  5 percent of the suggested retail price that is available to the jobber to cover costs and provide a profit.
D)  5 percent of the suggested retail price that is available to the ultimate consumer.
E)  5 percent of the suggested retail price that is the profit margin to the manufacturer.F) C) and D)
G) B) and C)

Question 11

When microwave ovens were in the introduction stage of their product life cycle, some consumers were willing to pay exorbitant prices for these innovative ovens. Taking advantage of this strong consumer desire, marketers set the price for microwave ovens at the highest initial price possible. Marketers of microwave ovens used a __________ pricing strategy.

Accepted Answer

A)  skimming
B)  penetration
C)  prestige
D)  price lining
E)  bundleF) A) and C)
G) B) and C)

Question 12

When is skimming pricing an effective strategy?

Accepted Answer

Skimming pricing is an effective strateg...

Question 13

A penetration pricing policy is most likely to be effective when

Accepted Answer

A)  lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost.
B)  the high initial price will not attract competitors.
C)  a low initial price discourages competitors from entering the market.
D)  customers interpret the high price as signifying high quality.
E)  enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable.F) None of the above
G) A) and C)

Question 14

To reward wholesalers and retailers for having supplies in stock at the time customers want, manufacturers offer

Accepted Answer

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

Question 15

The four types of discounts are

Accepted Answer

A)  quantity, trade-in, promotional, and cash.
B)  quantity, seasonal, trade (functional) , and cash.
C)  quantity, seasonal, promotional, and FOB.
D)  cash, trade-in, seasonal, and promotional.
E)  trade-in, promotional, geographic, and functional.F) A) and D)
G) B) and E)

Question 16

What pricing method is often used because of the difficulty in establishing a benchmark of sales or investment to show how much of a firm's effort is needed to achieve the target?

Accepted Answer

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

Question 17

What is the difference between a fixed-price policy and a dynamic pricing policy?

Accepted Answer

A fixed-price policy, also called a one-...

Question 18

A skimming pricing policy is likely to be most effective when (1)  enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable; (2)  __________; (3)  lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost; and (4)  customers interpret the high price as signifying high quality.

Accepted Answer

A)  the high initial price will not attract competitors
B)  consumers tend to be price-sensitive
C)  it will be easier to set measurable sales unit goals
D)  a lower price will significantly reduce unit costs
E)  consumers perceive your product to be similar to other products on the marketF) A) and C)
G) B) and E)

Exam 14: Arriving at the Final Price

The four types of discounts are

Correct Answer
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All of the following are demand-oriented approaches to selecting an approximate price level except

Correct Answer
verified

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

Correct Answer
verified

To reward wholesalers and retailers for having supplies in stock at the time customers want, manufacturers offer

Correct Answer
verified

The Consumer Goods Pricing Act, the Sherman Act, the Federal Trade Commission Act, and the Robinson-Patman Act all address different aspects of deceptive pricing. Select one example for each act and explain which aspects of the practice would be considered illegal.

Correct Answer
verified
The Consumer Goods Pricing Act considers...
View Answer

A penetration pricing policy is most likely to be effective when

Correct Answer
verified

If the terms of the trade discount are listed 20/10/5, the number "5" represents

Correct Answer
verified

Explain predatory pricing.

Correct Answer
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Predatory pricing is the practice of cha...
View Answer

What pricing method is often used because of the difficulty in establishing a benchmark of sales or investment to show how much of a firm's effort is needed to achieve the target?

Correct Answer
verified

What is the difference between a fixed-price policy and a dynamic pricing policy?

Correct Answer
verified
A fixed-price policy, also called a one-...
View Answer

While often changes price based upon color or style, often changes prices based on time, day, week, or season.

Correct Answer
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Correct Answer
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Correct Answer
verified

After offering a promotional allowance, the price of a product returns to its regular price level. When this happens, the retail store's gross margin on that product __________ on those items that were bought with the allowance but not sold during the price special promotion.

Correct Answer
verified

What is it called when a manufacturer offers discounts to resellers in the marketing channel on the basis of where they are in the channel?

Correct Answer
verified

When is skimming pricing an effective strategy?

Correct Answer
verified
Skimming pricing is an effective strateg...
View Answer

Selecting one or more geographical locations from which the list price for products plus freight expenses are charged to the buyer is referred to as

Correct Answer
verified

If the cash discount terms for a $500 purchase are 4/10 net 30, the number 4 refers to

Correct Answer
verified

Exam 14: Arriving at the Final Price

The four types of discounts are

Correct AnswerverifiedShow Answer

All of the following are demand-oriented approaches to selecting an approximate price level except

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

To reward wholesalers and retailers for having supplies in stock at the time customers want, manufacturers offer

Correct AnswerverifiedShow Answer

The Consumer Goods Pricing Act, the Sherman Act, the Federal Trade Commission Act, and the Robinson-Patman Act all address different aspects of deceptive pricing. Select one example for each act and explain which aspects of the practice would be considered illegal.

Correct AnswerverifiedThe Consumer Goods Pricing Act considers...View AnswerShow Answer

A penetration pricing policy is most likely to be effective when

Correct AnswerverifiedShow Answer

If the terms of the trade discount are listed 20/10/5, the number "5" represents

Correct AnswerverifiedShow Answer

Explain predatory pricing.

Correct AnswerverifiedPredatory pricing is the practice of cha...View AnswerShow Answer

What pricing method is often used because of the difficulty in establishing a benchmark of sales or investment to show how much of a firm's effort is needed to achieve the target?

Correct AnswerverifiedShow Answer

What is the difference between a fixed-price policy and a dynamic pricing policy?

Correct AnswerverifiedA fixed-price policy, also called a one-...View AnswerShow Answer

While __________ often changes price based upon color or style, __________ often changes prices based on time, day, week, or season.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

After offering a promotional allowance, the price of a product returns to its regular price level. When this happens, the retail store's gross margin on that product __________ on those items that were bought with the allowance but not sold during the price special promotion.

Correct AnswerverifiedShow Answer

What is it called when a manufacturer offers discounts to resellers in the marketing channel on the basis of where they are in the channel?

Correct AnswerverifiedShow Answer

When is skimming pricing an effective strategy?

Correct AnswerverifiedSkimming pricing is an effective strateg...View AnswerShow Answer

Selecting one or more geographical locations from which the list price for products plus freight expenses are charged to the buyer is referred to as

Correct AnswerverifiedShow Answer

If the cash discount terms for a $500 purchase are 4/10 net 30, the number 4 refers to

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The Consumer Goods Pricing Act considers...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Predatory pricing is the practice of cha...
View Answer

Correct Answer
verified

Correct Answer
verified
A fixed-price policy, also called a one-...
View Answer

While often changes price based upon color or style, often changes prices based on time, day, week, or season.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Skimming pricing is an effective strateg...
View Answer

Correct Answer
verified

Correct Answer
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