Question 1

A pricing method where a supplier is reimbursed for all costs,regardless of what they may be,and who also receives an agreed upon dollar amount of profit that is independent of the final cost of the project,is referred to as

Accepted Answer

A)   target return on investment pricing.
B)   cost-plus-percentage-of-cost pricing.
C)   target return on sales pricing.
D)   experience curve pricing.
E)   cost-plus-fixed-fee pricing.F) A) and C)
G) A) and B)

Question 2

Which of the following statements is most accurate?

Accepted Answer

A)   For some products, price influences the perception of overall quality, and ultimately value, to consumers.
B)   A consumer's view of a product's value depends almost entirely on external assessments of quality.
C)   A consumer's view of value is a function of his or her education and income.
D)   Price plays only a small part in a consumer's perceived value of a product or service.
E)   Price plays a large role in assessing value but a very minor role in assessing quality.F) A) and C)
G) B) and C)

Question 3

What is loss-leader pricing and why do retailers use it?

Accepted Answer

For a special promotion,many retail stor...

Question 4

If a firm finds the demand for one of its products is inelastic,it can increase its total revenues by

Accepted Answer

A)   lowering its price.
B)   increasing fixed costs only.
C)   increasing variable costs only.
D)   increasing both fixed and variable costs.
E)   raising its price.F) A) and D)
G) A) and E)

Question 5

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) A) and D)
G) All of the above

Question 6

What is bait and switch?
 Give an example of it.

Accepted Answer

Bait and switch is a common deceptive pr...

Question 7

A company that manages apartments decides to buy 15 new dishwashers at a list price of $550 each as replacements for old dishwashers in a small apartment complex it owns.Because the company is buying more than 10 dishwashers,it is eligible for a $150-per-unit quantity discount.Financing charges total $20 per unit.The company gets $10 per dishwasher for the 15 dishwashers traded in.What is the final price the company will pay for each dishwasher?

Accepted Answer

A)   $390
B)   $400
C)   $410
D)   $430
E)   $730F) B) and E)
G) A) and E)

Question 8

A demand curve graph typically appears as

Accepted Answer

A)   a parabola with the apex representing the highest price that can be charged without losing customers.
B)   a diagonal line going from upper left to lower right demonstrating that as price goes down, demand goes up.
C)   an inverted parabola with the lowest point representing the lowest price that can be charged and still meet the company's profit objectives.
D)   a diagonal line going from lower left to upper right demonstrating that as prices go up, demand goes up proportionately.
E)   two intersecting lines that identify the point at which supply and demand are exactly the same.F) None of the above
G) A) and B)

Question 9

________ = (Unit price * Quantity sold) - Total cost.

Accepted Answer

A)   Total revenue
B)   Variable cost
C)   Net present value
D)   Profit
E)   Break-even pointF) A) and E)
G) B) and D)

Question 10

According to the profit equation,profit equals

Accepted Answer

A)   Total cost + Total revenue.
B)   Total revenue - Total cost.
C)   Marginal revenue - Marginal cost.
D)   Price * Quantity.
E)   Total revenue + Marginal cost.F) A) and B)
G) A) and C)

Question 11

Airlines,hotels,and car rental firms all engage in __________ by varying prices based on time,day,week,or season to match supply and demand.

Accepted Answer

A)   skimming pricing
B)   yield management pricing
C)   bundle pricing
D)   target pricing
E)   prestige pricingF) A) and B)
G) A) and C)

Question 12

Figure 11-6a 
-In the break-even chart in Figure 11-6a,the triangular area GAF represents the firm's

Accepted Answer

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

Question 13

The Brazilian government wants to build a global positioning satellite (GPS) system.The satellite manufacturer will receive a mutually agreed upon 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) D) and E)

Question 14

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) C) and D)
G) A) and B)

Question 15

Setting a market price for a product or product class based on a subjective feel for the competitors' price or market price as the benchmark is referred to as

Accepted Answer

A)   customary pricing.
B)   above-, at-, or below-market pricing.
C)   standard markup pricing.
D)   competitive margin pricing.
E)   experience curve pricing.F) D) and E)
G) B) and E)

Question 16

The use of special fees and surcharges is driven by consumers' zeal for __________ combined with the ease of making price comparisons on the Internet.

Accepted Answer

A)   readily accessible information
B)   low prices
C)   quality
D)   value
E)   warrantiesF) B) and E)
G) A) and B)

Question 17

Architectural firms that specialize in designing and constructing one-of-a-kind custom buildings such as the Rock and Roll Hall of Fame often use which pricing strategy?

Accepted Answer

A)   cost-plus pricing
B)   experience curve pricing
C)   standard markup pricing
D)   yield management pricing
E)   price liningF) A) and D)
G) C) and D)

Question 18

How do consumers use price in their assessments of value?

Accepted Answer

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

Question 19

Target pricing refers to

Accepted Answer

A)   a method of selecting specific prices wholesalers and retailers are willing to pay based upon the elasticity of each given item.
B)   a method of charging different prices to maximize revenue for a set amount of capacity at any given time.
C)   the practice of simultaneously increasing product and service benefits while maintaining or decreasing price.
D)   a method of estimating the price that ultimate consumers would be willing to pay for a product, then working backward through markups taken by retailers and wholesalers to determine what price to charge wholesalers.
E)   a method of determining how much wholesalers wish to charge its customers, deliberately adjusting the composition and features of the product to achieve the price to consumers.F) A) and B)
G) A) and C)

Question 20

Total cost refers to

Accepted Answer

A)   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.
B)   the change in expenses that results from producing and marketing one additional unit of a product.
C)   the average amount of money received for selling one unit of a product or simply the price of that unit.
D)   the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold.
E)   the total expense incurred by a firm in producing and marketing a product, which equals the sum of fixed cost and variable cost.F) C) and D)
G) A) and B)

Exam 11: Pricing Products and Services

Architectural firms that specialize in designing and constructing one-of-a-kind custom buildings such as the Rock and Roll Hall of Fame often use which pricing strategy?

Correct Answer
verified

Total cost refers to

Correct Answer
verified

________ = (Unit price * Quantity sold) - Total cost.

Correct Answer
verified

According to the profit equation,profit equals

Correct Answer
verified

What is loss-leader pricing and why do retailers use it?

Correct Answer
verified
For a special promotion,many retail stor...
View Answer

What is bait and switch? Give an example of it.

Correct Answer
verified
Bait and switch is a common deceptive pr...
View Answer

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

Correct Answer
verified

Figure 11-6a -In the break-even chart in Figure 11-6a,the triangular area GAF represents the firm's

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

If a firm finds the demand for one of its products is inelastic,it can increase its total revenues by

Correct Answer
verified

Correct Answer
verified

Setting a market price for a product or product class based on a subjective feel for the competitors' price or market price as the benchmark is referred to as

Correct Answer
verified

A pricing method where a supplier is reimbursed for all costs,regardless of what they may be,and who also receives an agreed upon dollar amount of profit that is independent of the final cost of the project,is referred to as

Correct Answer
verified

Target pricing refers to

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

A demand curve graph typically appears as

Correct Answer
verified

Airlines,hotels,and car rental firms all engage in __________ by varying prices based on time,day,week,or season to match supply and demand.

Correct Answer
verified

The use of special fees and surcharges is driven by consumers' zeal for __________ combined with the ease of making price comparisons on the Internet.

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

Which of the following statements is most accurate?

Correct Answer
verified

Exam 11: Pricing Products and Services

Architectural firms that specialize in designing and constructing one-of-a-kind custom buildings such as the Rock and Roll Hall of Fame often use which pricing strategy?

Correct AnswerverifiedShow Answer

Total cost refers to

Correct AnswerverifiedShow Answer

________ = (Unit price * Quantity sold) - Total cost.

Correct AnswerverifiedShow Answer

According to the profit equation,profit equals

Correct AnswerverifiedShow Answer

What is loss-leader pricing and why do retailers use it?

Correct AnswerverifiedFor a special promotion,many retail stor...View AnswerShow Answer

What is bait and switch? Give an example of it.

Correct AnswerverifiedBait and switch is a common deceptive pr...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Figure 11-6a -In the break-even chart in Figure 11-6a,the triangular area GAF represents the firm's

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

If a firm finds the demand for one of its products is inelastic,it can increase its total revenues by

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Setting a market price for a product or product class based on a subjective feel for the competitors' price or market price as the benchmark is referred to as

Correct AnswerverifiedShow Answer

A pricing method where a supplier is reimbursed for all costs,regardless of what they may be,and who also receives an agreed upon dollar amount of profit that is independent of the final cost of the project,is referred to as

Correct AnswerverifiedShow Answer

Target pricing refers to

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

A demand curve graph typically appears as

Correct AnswerverifiedShow Answer

Airlines,hotels,and car rental firms all engage in __________ by varying prices based on time,day,week,or season to match supply and demand.

Correct AnswerverifiedShow Answer

The use of special fees and surcharges is driven by consumers' zeal for __________ combined with the ease of making price comparisons on the Internet.

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

Which of the following statements is most accurate?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
For a special promotion,many retail stor...
View Answer

Correct Answer
verified
Bait and switch is a common deceptive pr...
View 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

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

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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