Question 1

Which of the following statements about consumer demand as a pricing constraint is most accurate?

Accepted Answer

A)   The number of potential buyers for the product class has little effect on the price a seller can charge.
B)   The number of potential buyers for the product affects the price a seller can charge, but only if the product is using a push strategy in the channel.
C)   The number of potential buyers for the product affects the price a seller can charge, but only if the product is a necessity item.
D)   The number of potential buyers for the brand affects the price a seller can charge in the growth stage of a product life cycle, but not in the introductory stage.
E)   The number of potential buyers generally affects the price a seller can charge.F) A) and B)
G) A) and C)

Question 2

With a __________ pricing strategy,a price setter stresses the __________ side of the pricing problem.

Accepted Answer

A)   demand-oriented; cost
B)   supply-oriented; target ROI
C)   competition-oriented; marketing channel
D)   cost-oriented; cost
E)   profit-oriented; revenueF) B) and D)
G) A) and B)

Question 3

In one of its least favorite actions,Amazon.com was caught manipulating its prices.Avid DVD buyers,buying in quantity for resale,found that the online retailer was offering different customers different prices for the same DVD,and complained vociferously.Company officials admitted that the company was trying to see how much it could charge for an item before buyers balked.Amazon was caught attempting

Accepted Answer

A)   horizontal price-fixing.
B)   price discrimination.
C)   resale price maintenance.
D)   predatory pricing.
E)   bait and switch pricing.F) A) and B)
G) A) and C)

Question 4

The manufacturer of a new kind of fat-free ice cream that has the consistency and taste of regular ice cream is thinking of using a penetration pricing strategy for its new product.Which of the following conditions would argue against using a penetration pricing strategy for the tasty dessert treat?

Accepted Answer

A)   The ice cream market is highly conservative.
B)   Economies of scale in production would be substantial.
C)   Retailers are not willing to carry new brands of ice cream in the already overcrowded category.
D)   Once the initial price is set, it is nearly impossible to lower the price without alienating early buyers.
E)   The ice cream market exhibits inelastic demand over a fairly broad range of prices.F) B) and E)
G) C) and E)

Question 5

You can buy a General Electric dishwasher for $399 or you can buy a similar Bosch brand dishwasher for $989.Since Bosch uses its pricing strategy to project a high-quality product image,it is most likely using __________ pricing.

Accepted Answer

A)   yield management
B)   standard markup
C)   prestige
D)   penetration
E)   cost-plus-fixed-feeF) A) and E)
G) B) and D)

Question 6

Figure 11-6a 
-In the break-even chart in Figure 11-6a,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) C) and D)
G) None of the above

Question 7

Which of the following is a competition-oriented approach to pricing?

Accepted Answer

A)   skimming pricing
B)   target pricing
C)   customary pricing
D)   target return-on-sales pricing
E)   standard markup pricingF) None of the above
G) A) and B)

Question 8

Figure 11-3b 1 to the demand curve D2,the profit A)  impacts cannot be determined. Figure 11-3b does not indicate what happens to profit when the quantity demanded changes. B)  increases from $2 to $3 per unit. C)  stays the same per unit. D)  increases from $6 to $8 per unit. E)  decreases from $8 to $6 per unit." class="answers-bank-image d-inline" rel="preload" >
-Figure 11-3b shows that when the quantity demanded for Red Baron frozen cheese pizzas moves from 2 to 3 million units from the demand curve D1 to the demand curve D2,the profit

Accepted Answer

A)   impacts cannot be determined. Figure 11-3b does not indicate what happens to profit when the quantity demanded changes.
B)   increases from $2 to $3 per unit.
C)   stays the same per unit.
D)   increases from $6 to $8 per unit.
E)   decreases from $8 to $6 per unit.F) C) and D)
G) A) and E)

Question 9

To increase value,marketers may __________,decrease price,or do both.

Accepted Answer

A)   decrease benefits
B)   increase benefits
C)   increase price
D)   increase advertising
E)   do nothing and let the perceived value of the item increase as it matures in the life cycleF) B) and E)
G) B) and C)

Question 10

A reference value is developed by the consumer through

Accepted Answer

A)   considering the amount of time and energy a consumer puts into the purchase process.
B)   judging similar items used by the consumer's peers.
C)   performing a careful break-even analysis.
D)   comparing the costs and benefits of substitute items.
E)   examining the true difference between customers' "needs" and "wants."F) D) and E)
G) C) and D)

Question 11

The vertical axis of a demand curve graph represents

Accepted Answer

A)   market growth rate.
B)   relative market share.
C)   price per unit.
D)   potential profit in dollars.
E)   quantity demanded.F) B) and C)
G) B) and E)

Question 12

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 shopping experience as

Accepted Answer

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

Question 13

RadioShack,an electronics retail chain,couldn't compete with the prices offered by other retailers.The company enacted price-matching programs and promoted large discounts on its merchandise to raise cash and hopefully stave off bankruptcy.The best pricing objective at this point for RadioShack most likely was

Accepted Answer

A)   profit.
B)   market share.
C)   unit volume.
D)   survival.
E)   social responsibility.F) A) and B)
G) D) and E)

Question 14

The total expense incurred by a firm in producing and marketing a product,which equals the sum of fixed cost and variable cost,is referred to as

Accepted Answer

A)   overhead cost.
B)   total cost.
C)   unit cost.
D)   average cost.
E)   marginal cost.F) A) and E)
G) A) and B)

Question 15

The key to setting a final price for a product is finding an approximate price level to use as a reasonable starting point.Which of the following is one of four common approaches to selecting an approximate price level?

Accepted Answer

A)   cost-oriented
B)   cause-oriented
C)   revenue-oriented
D)   stakeholder-oriented
E)   distribution-orientedF) A) and C)
G) All of the above

Question 16

Quantity discounts refers to

Accepted Answer

A)   price reductions in unit costs for placing a larger order.
B)   price reductions for placing long-term pre-scheduled orders.
C)   price reductions to encourage retailers to stock inventory earlier than their normal demand would require.
D)   BOGOs.
E)   reductions in unit costs for taking merchandise that will soon be replaced by new and improved versions of the original product.F) A) and D)
G) B) and C)

Question 17

What pricing strategy did the National Aeronautics and Space Administration (NASA) use to pay Lockheed Martin for the Orion lunar spacecraft?

Accepted Answer

A)   cost-plus-percentage-of-cost pricing
B)   experience curve pricing
C)   standard markup pricing
D)   yield management pricing
E)   cost-plus-fixed-fee pricingF) A) and D)
G) All of the above

Question 18

The use of special fees and surcharges is driven by consumers' zeal for low prices and

Accepted Answer

A)   the ease of making price comparisons on the Internet.
B)   value, the idea of getting more for their money.
C)   the need for extra accessories.
D)   avoiding state sales taxes from Internet purchases.
E)   a dislike of price haggling or negotiating.F) All of the above
G) B) and D)

Question 19

All of the following are demand factors except

Accepted Answer

A)   the price of similar products.
B)   consumer tastes.
C)   consumer income.
D)   the availability of similar products.
E)   the number of distribution outlets carrying the product.F) A) and B)
G) D) and E)

Question 20

The owner of a small restaurant that sells takeout fried chicken and biscuits each month pays $2,500 in rent,$500 in utilities,$750 interest on his loan,insurance premium of $200,and $250 on advertising on local buses.A bucket of chicken is priced at $9.50.Unit variable costs for the bucket of chicken are
) 50.How many buckets of chicken does the restaurant need to sell to break even each month?

Accepted Answer

A)   442 buckets
B)   764 buckets
C)   1,050 buckets
D)   3,150 buckets
E)   4,200 bucketsF) A) and D)
G) B) and D)

Exam 11: Pricing Products and Services

Correct Answer
verified

The vertical axis of a demand curve graph represents

Correct Answer
verified

Quantity discounts refers to

Correct Answer
verified

Correct Answer
verified

The key to setting a final price for a product is finding an approximate price level to use as a reasonable starting point.Which of the following is one of four common approaches to selecting an approximate price level?

Correct Answer
verified

Which of the following statements about consumer demand as a pricing constraint is most accurate?

Correct Answer
verified

Correct Answer
verified

With a pricing strategy,a price setter stresses the side of the pricing problem.

Correct Answer
verified

Which of the following is a competition-oriented approach to pricing?

Correct Answer
verified

To increase value,marketers may __________,decrease price,or do both.

Correct Answer
verified

What pricing strategy did the National Aeronautics and Space Administration (NASA) use to pay Lockheed Martin for the Orion lunar spacecraft?

Correct Answer
verified

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

Correct Answer
verified

The use of special fees and surcharges is driven by consumers' zeal for low prices and

Correct Answer
verified

Correct Answer
verified

The manufacturer of a new kind of fat-free ice cream that has the consistency and taste of regular ice cream is thinking of using a penetration pricing strategy for its new product.Which of the following conditions would argue against using a penetration pricing strategy for the tasty dessert treat?

Correct Answer
verified

A reference value is developed by the consumer through

Correct Answer
verified

All of the following are demand factors except

Correct Answer
verified

Figure 11-3b -Figure 11-3b shows that when the quantity demanded for Red Baron frozen cheese pizzas moves from 2 to 3 million units from the demand curve D₁ to the demand curve D₂,the profit

Correct Answer
verified

The total expense incurred by a firm in producing and marketing a product,which equals the sum of fixed cost and variable cost,is referred to as

Correct Answer
verified

You can buy a General Electric dishwasher for $399 or you can buy a similar Bosch brand dishwasher for $989.Since Bosch uses its pricing strategy to project a high-quality product image,it is most likely using __________ pricing.

Correct Answer
verified

Exam 11: Pricing Products and Services

Correct AnswerverifiedShow Answer

The vertical axis of a demand curve graph represents

Correct AnswerverifiedShow Answer

Quantity discounts refers to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The key to setting a final price for a product is finding an approximate price level to use as a reasonable starting point.Which of the following is one of four common approaches to selecting an approximate price level?

Correct AnswerverifiedShow Answer

Which of the following statements about consumer demand as a pricing constraint is most accurate?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

With a __________ pricing strategy,a price setter stresses the __________ side of the pricing problem.

Correct AnswerverifiedShow Answer

Which of the following is a competition-oriented approach to pricing?

Correct AnswerverifiedShow Answer

To increase value,marketers may __________,decrease price,or do both.

Correct AnswerverifiedShow Answer

What pricing strategy did the National Aeronautics and Space Administration (NASA) use to pay Lockheed Martin for the Orion lunar spacecraft?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The use of special fees and surcharges is driven by consumers' zeal for low prices and

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A reference value is developed by the consumer through

Correct AnswerverifiedShow Answer

All of the following are demand factors except

Correct AnswerverifiedShow Answer

Figure 11-3b -Figure 11-3b shows that when the quantity demanded for Red Baron frozen cheese pizzas moves from 2 to 3 million units from the demand curve D1 to the demand curve D2,the profit

Correct AnswerverifiedShow Answer

The total expense incurred by a firm in producing and marketing a product,which equals the sum of fixed cost and variable cost,is referred to as

Correct AnswerverifiedShow Answer

You can buy a General Electric dishwasher for $399 or you can buy a similar Bosch brand dishwasher for $989.Since Bosch uses its pricing strategy to project a high-quality product image,it is most likely using __________ pricing.

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
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Correct Answer
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Correct Answer
verified

With a pricing strategy,a price setter stresses the side of the pricing problem.

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

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
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Figure 11-3b -Figure 11-3b shows that when the quantity demanded for Red Baron frozen cheese pizzas moves from 2 to 3 million units from the demand curve D₁ to the demand curve D₂,the profit

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified