Question 1

In response to Duracell's introduction of the Duracell Ultra battery,Energizer introduced an Advanced Formula battery.But unlike Duracell,Energizer priced its batteries at a low initial price,believing that consumers were too price sensitive to pay more in this category.In this case,Energizer used

Accepted Answer

A)   penetration pricing.
B)   prestige pricing.
C)   skimming pricing.
D)   price lining.
E)   cost-plus-fixed-fee pricing.F) B) and C)
G) C) and D)

Question 2

A firm's profit equation equals

Accepted Answer

A)   Total cost + Total revenue or [(Fixed cost + Variable cost)  + (Unit price * Quantity sold) ].
B)   Total revenue - Total cost or [(Unit price * Quantity sold)  - (Fixed cost + Variable cost) ].
C)   Total cost - Marginal cost or [(Fixed cost + Variable cost)  - (Unit price * Quantity sold) ].
D)   Total cost - Variable cost or [(Fixed cost + Variable cost)  - (Unit price *Quantity sold) ].
E)   Total revenue / Total cost or [(Unit price * Quantity sold)  / (Fixed cost + Variable cost) ].F) B) and D)
G) A) and C)

Question 3

To encourage buyers to stock inventory earlier than their normal demand would require,manufacturers often use

Accepted Answer

A)   quantity discounts.
B)   quarterly discounts.
C)   seasonal discounts.
D)   trade discounts.
E)   functional discounts.F) C) and E)
G) A) and E)

Question 4

Figure 11-6 
-Figure 11-6 depicts a

Accepted Answer

A)   Gantt chart.
B)   demand curve.
C)   break-even chart.
D)   ROI analysis.
E)   cross-tabulation.F) D) and E)
G) A) and B)

Question 5

When a firm offers a very low price on a product to attract customers to a store,and once in the store,the customer is persuaded to purchase a higher-priced item,the practice is referred to as

Accepted Answer

A)   predatory pricing.
B)   deceptive pricing.
C)   price discrimination.
D)   caveat emptor.
E)   bait and switch.F) A) and D)
G) D) and E)

Question 6

You are president of a small electric appliance manufacturer.You want to reduce your break-even quantity.All things being equal,you can do this by

Accepted Answer

A)   increasing the quantity sold, while keeping price unchanged.
B)   reducing marginal revenue.
C)   reducing unit variable cost.
D)   increasing fixed cost.
E)   increasing total cost.F) B) and E)
G) B) and C)

Question 7

Mike Morgan,a sales representative for a major food service distributor of Betty Crocker's Warm Delights,wanted to encourage repeat purchases by his grocery customers-supermarkets,mass merchandisers,etc.To accomplish this objective,Morgan offered the following discounts to his customers: a 10 percent discount for buying 1 to 49 cases of Warm Delights within a calendar month.The discount increases to 12 percent if 50 to 99 cases of Warm Delights are purchased and to 15 percent if 100 or more cases of Warm Delights are purchased within the same calendar month.What type of discount was Morgan offering his customers?

Accepted Answer

A)   a seasonal discount
B)   a quantity discount
C)   a cash discount
D)   a trade discount
E)   a case allowance discountF) B) and D)
G) A) and D)

Question 8

Figure 11-6a 
-In break-even chart in Figure 11-6a,point A identifies the firm's __________ point.

Accepted Answer

A)   loss
B)   price
C)   margin
D)   profit
E)   break-evenF) B) and E)
G) A) and D)

Question 9

Demand curve refers to a graph that relates

Accepted Answer

A)   the quantity sold and price, which shows the maximum number of units that will be sold at a given price.
B)   the quantity sold and price, which shows the minimum number of units that must be sold to break even.
C)   the quantity sold and price, which shows the minimum number of units that must be sold in order to make a profit.
D)   total production costs to various price points in order to determine how many units must be sold in order to realize a predetermined profit.
E)   primary demand to selective demand.F) C) and D)
G) A) and D)

Question 10

There are a lot of skateboards on the market,but when it was launched the BMW Streetcarver was the only one with stabilizers and wheel design based on BMW's automobiles.This technology gave the BMW Streetcarver better control at high speeds and around sharp turns than any other brand.The skateboard was priced at $495,which left many consumers (especially young males) who might have wanted to buy the Streetcarver unable to afford it.This inability to pay for the high-priced BMW-made skateboard shows the effect of __________ on sales.

Accepted Answer

A)   demand factors
B)   macroeconomic environmental factors
C)   barter factors
D)   supply factors
E)   exchange parametersF) B) and E)
G) A) and B)

Question 11

Figure 11-3a 1,the quantity demanded A)  increases from 2 to 3 million units per year. B)  decreases from 3 to 2 million units per year. C)  stays the same. D)  increases from 6 to 8 million units per year. E)  decreases from 8 to 6 million units per year." class="answers-bank-image d-inline" rel="preload" >
-Figure 11-3a shows that when the price for Red Baron frozen cheese pizzas moves from $8 to $6 per unit along the demand curve D1,the quantity demanded

Accepted Answer

A)   increases from 2 to 3 million units per year.
B)   decreases from 3 to 2 million units per year.
C)   stays the same.
D)   increases from 6 to 8 million units per year.
E)   decreases from 8 to 6 million units per year.F) A) and D)
G) B) and C)

Question 12

According to the price equation,final price equals __________ minus incentives and allowances plus extra fees.

Accepted Answer

A)   salaries
B)   the list price
C)   profits
D)   trade-ins
E)   taxesF) A) and B)
G) C) and D)

Question 13

Figure 11-2 
-Figure 11-2 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) B) and D)
G) All of the above

Question 14

In some cases,manufacturers design products for different price points and retailers apply __________ to achieve the three or four different price points offered to consumers.

Accepted Answer

A)   progressively higher markup percentages
B)   different markup percentages depending on how long the item remains on their shelves
C)   above-, at-, or below-market pricing
D)   approximately the same markup percentages
E)   elasticity of demand pricing calculationsF) A) and B)
G) B) and D)

Question 15

When you buy a used car from a CarMax dealership,you are offered the car at a "no haggle" price.You can buy it or not,but there is no negotiating the published price because of the seller's

Accepted Answer

A)   customary pricing strategy.
B)   one-price policy.
C)   uniform pricing policy.
D)   dynamic pricing policy.
E)   dynamic pricing strategy.F) C) and D)
G) A) and E)

Question 16

Figure 11-2 
-Figure 11-2 represents the four approaches to selecting an appropriate price level.Box A represents which approach?

Accepted Answer

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

Question 17

Setting an annual target of a specific dollar volume of profit is referred to as

Accepted Answer

A)   target profit pricing.
B)   target return-on-investment pricing.
C)   loss-leader pricing.
D)   at-, above-, or below-market pricing.
E)   yield management pricing.F) B) and C)
G) C) and E)

Question 18

When is skimming pricing an effective strategy?

Accepted Answer

Skimming pricing is an effective strateg...

Question 19

Several companies produce latex gloves that are used in a variety of different industries.If one of the glove manufacturers decreases its price by just a few percentage points,it will result in a significant increase in quantity demanded.The demand for latex gloves is

Accepted Answer

A)   synergistic.
B)   inelastic.
C)   unitary.
D)   elastic.
E)   static.F) B) and C)
G) A) and B)

Question 20

Another name for a dynamic price policy is

Accepted Answer

A)   target pricing.
B)   fluid pricing.
C)   price lining.
D)   market-based pricing.
E)   a flexible-price policy.F) C) and D)
G) A) and E)

Exam 11: Pricing Products and Services

Figure 11-6a -In break-even chart in Figure 11-6a,point A identifies the firm's __________ point.

Correct Answer
verified

Figure 11-2 -Figure 11-2 represents the four approaches to selecting an appropriate price level.Box A represents which approach?

Correct Answer
verified

Several companies produce latex gloves that are used in a variety of different industries.If one of the glove manufacturers decreases its price by just a few percentage points,it will result in a significant increase in quantity demanded.The demand for latex gloves is

Correct Answer
verified

When is skimming pricing an effective strategy?

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

Correct Answer
verified

Figure 11-2 -Figure 11-2 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

When a firm offers a very low price on a product to attract customers to a store,and once in the store,the customer is persuaded to purchase a higher-priced item,the practice is referred to as

Correct Answer
verified

Demand curve refers to a graph that relates

Correct Answer
verified

You are president of a small electric appliance manufacturer.You want to reduce your break-even quantity.All things being equal,you can do this by

Correct Answer
verified

Setting an annual target of a specific dollar volume of profit is referred to as

Correct Answer
verified

A firm's profit equation equals

Correct Answer
verified

In response to Duracell's introduction of the Duracell Ultra battery,Energizer introduced an Advanced Formula battery.But unlike Duracell,Energizer priced its batteries at a low initial price,believing that consumers were too price sensitive to pay more in this category.In this case,Energizer used

Correct Answer
verified

To encourage buyers to stock inventory earlier than their normal demand would require,manufacturers often use

Correct Answer
verified

Correct Answer
verified

Another name for a dynamic price policy is

Correct Answer
verified

Figure 11-3a -Figure 11-3a shows that when the price for Red Baron frozen cheese pizzas moves from $8 to $6 per unit along the demand curve D₁,the quantity demanded

Correct Answer
verified

Figure 11-6 -Figure 11-6 depicts a

Correct Answer
verified

When you buy a used car from a CarMax dealership,you are offered the car at a "no haggle" price.You can buy it or not,but there is no negotiating the published price because of the seller's

Correct Answer
verified

According to the price equation,final price equals __________ minus incentives and allowances plus extra fees.

Correct Answer
verified

In some cases,manufacturers design products for different price points and retailers apply __________ to achieve the three or four different price points offered to consumers.

Correct Answer
verified

Exam 11: Pricing Products and Services

Figure 11-6a -In break-even chart in Figure 11-6a,point A identifies the firm's __________ point.

Correct AnswerverifiedShow Answer

Figure 11-2 -Figure 11-2 represents the four approaches to selecting an appropriate price level.Box A represents which approach?

Correct AnswerverifiedShow Answer

Several companies produce latex gloves that are used in a variety of different industries.If one of the glove manufacturers decreases its price by just a few percentage points,it will result in a significant increase in quantity demanded.The demand for latex gloves is

Correct AnswerverifiedShow Answer

When is skimming pricing an effective strategy?

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

Correct AnswerverifiedShow Answer

Figure 11-2 -Figure 11-2 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

When a firm offers a very low price on a product to attract customers to a store,and once in the store,the customer is persuaded to purchase a higher-priced item,the practice is referred to as

Correct AnswerverifiedShow Answer

Demand curve refers to a graph that relates

Correct AnswerverifiedShow Answer

You are president of a small electric appliance manufacturer.You want to reduce your break-even quantity.All things being equal,you can do this by

Correct AnswerverifiedShow Answer

Setting an annual target of a specific dollar volume of profit is referred to as

Correct AnswerverifiedShow Answer

A firm's profit equation equals

Correct AnswerverifiedShow Answer

In response to Duracell's introduction of the Duracell Ultra battery,Energizer introduced an Advanced Formula battery.But unlike Duracell,Energizer priced its batteries at a low initial price,believing that consumers were too price sensitive to pay more in this category.In this case,Energizer used

Correct AnswerverifiedShow Answer

To encourage buyers to stock inventory earlier than their normal demand would require,manufacturers often use

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Another name for a dynamic price policy is

Correct AnswerverifiedShow Answer

Figure 11-3a -Figure 11-3a shows that when the price for Red Baron frozen cheese pizzas moves from $8 to $6 per unit along the demand curve D1,the quantity demanded

Correct AnswerverifiedShow Answer

Figure 11-6 -Figure 11-6 depicts a

Correct AnswerverifiedShow Answer

When you buy a used car from a CarMax dealership,you are offered the car at a "no haggle" price.You can buy it or not,but there is no negotiating the published price because of the seller's

Correct AnswerverifiedShow Answer

According to the price equation,final price equals __________ minus incentives and allowances plus extra fees.

Correct AnswerverifiedShow Answer

In some cases,manufacturers design products for different price points and retailers apply __________ to achieve the three or four different price points offered to consumers.

Correct AnswerverifiedShow Answer

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
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

Correct Answer
verified

Figure 11-3a -Figure 11-3a shows that when the price for Red Baron frozen cheese pizzas moves from $8 to $6 per unit along the demand curve D₁,the quantity demanded

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified