Question 1

deliberately adjusting the composition and features of the product to achieve the target price to consumers, is referred to as _________.

Accepted Answer

A)  cost-sensitivity pricing
B)  cost-plus percentage-of-cost pricing
C)  target pricing
D)  cost-plus fixed-fee pricing
E)  customer dominated pricingF) A) and C)
G) D) and E)

Question 2

Three different objectives relate to a firm's profit, which is often measured in terms of return on investment.One objective, known as _________, occurs when a firm sets a profit goal, usually determined by its board of directors.

Accepted Answer

A)  managing for long-run profits
B)  maximizing current profit
C)  target return
D)  minimizing risks
E)  break-even objectiveF) A) and B)
G) A) and C)

Question 3

Adding a fixed percentage to the cost of all items in a specific product class is referred to as

Accepted Answer

A)  target profit pricing.
B)  target return-on-investment pricing.
C)  standard markup pricing.
D)  customary pricing.
E)  everyday low pricing.F) C) and D)
G) B) and D)

Question 4

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
C)  loss leader pricing
D)  at, above, or below market pricing
E)  yield managementF) B) and E)
G) B) and D)

Question 5

Factors that determine consumers' willingness and ability to pay for products and services are referred to as

Accepted Answer

A)  the "misery index."
B)  demand factors.
C)  consumer income.
D)  elasticity factors.
E)  economic environmental factors.F) A) and B)
G) A) and E)

Question 6

One-price policy refers to

Accepted Answer

A)  setting different prices for products and services depending on individual buyers and purchase situations.
B)  setting the price of a line of products at a number of different specific pricing points.
C)  setting of prices for all items in a product line to cover the total cost and produce a profit for the complete line, not necessarily for each item.
D)  adding a fixed percentage to the cost of all items in a specific product class.
E)  setting one price for all buyers of a product or service.F) None of the above
G) All of the above

Question 7

Lady Marion Seafood, Inc.sells 5-pound packages of Alaska salmon.Assume its variable costs per package is $30, and its fixed cost is $250,000.It wants a target profit of $38,000 on a volume of 16,000 packages.What should it charge for a five-pound package of salmon?

Accepted Answer

A)  $25.00
B)  $30.00
C)  $40.00
D)  $48.00
E)  $55.00F) B) and E)
G) A) and E)

Question 8

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 actual price the company will pay for each dishwasher?

Accepted Answer

A)  $390
B)  $400
C)  $410
D)  $530
E)  $560F) B) and C)
G) A) and E)

Question 9

Which of the following statements is most accurate?

Accepted Answer

A)  Nonprofit organizations are exempt from having to cover costs of producing and/or marketing their products.
B)  Socially responsible corporations should have the pricing objective of covering all costs of producing and marketing a company's product, but they should not price their products to earn a profit.
C)  Regardless of a company's objectives, a firm must cover all the costs of producing and marketing product or the firm will fail.
D)  Elasticity of demand makes it virtually impossible for companies to cover all their marketing and production costs at all times.
E)  Marketing and production costs are the most difficult and expensive aspect of pricing because they draw so much capital away from other departments in the organization.F) A) and D)
G) B) and E)

Question 10

Target profit pricing refers to

Accepted Answer

A)  adjusting the price of a product so it is "in line" with that of its largest competitor.
B)  setting the price of a line of products at a number of different price points.
C)  adding a fixed percentage to the cost of all items in a specific product class.
D)  setting prices to achieve a profit that is a specified percentage of production costs.
E)  setting an annual target of a specific dollar volume of profit.F) A) and E)
G) B) and E)

Question 11

Price elasticity of demand measures how sensitive consumer demand and the firm's revenues are to changes in the product's price.Explain the difference between a product with elastic demand and a product with inelastic demand.

Accepted Answer

Elastic demand exists when a small perce...

Question 12

Allowances, like discounts; refer to

Accepted Answer

A)  rewards given to retailers to encourage early payment.
B)  payment extensions given in exchange for continual contracts.
C)  list price deductions based on surges in consumer demand.
D)  list price deductions based on sudden drops in consumer demand.
E)  reductions from list or quoted prices to buyers for performing some activity.F) A) and E)
G) C) and D)

Question 13

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 it is referred to as

Accepted Answer

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

Question 14

FIGURE 12-4 
-Position "D" in Figure 12-4 above represents the price premium of which of the following?

Accepted Answer

A)  Crunch 'n Munch
B)  Cracker Jack
C)  Fiddle Faddle
D)  Private Brands
E)  Seasonal, specialty, and regional brandsF) A) and B)
G) D) and E)

Question 15

What is standard markup pricing and when would it be used?

Accepted Answer

Standard markup pricing entails adding a...

Question 16

Geographic adjustments are made by manufacturers or wholesalers to cover

Accepted Answer

A)  production costs.
B)  administrative costs.
C)  promotional costs.
D)  variable costs.
E)  transportation costs.F) A) and E)
G) A) and B)

Question 17

Setting a price to achieve a profit that is a specified percentage of the sales volume is referred to as _________.

Accepted Answer

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

Question 18

The newer a product and the earlier it is in its life cycle,

Accepted Answer

A)  the lower the price the firm must charge.
B)  the more competition it has.
C)  the higher is the price that can usually be charged.
D)  the lower the production costs.
E)  the lower the unit variable cost.F) A) and E)
G) A) and B)

Question 19

The acronym FOB stands for _________.

Accepted Answer

A)  freight on board
B)  free on board
C)  freight of buyer
D)  forward onto buyer
E)  freight owner bonusF) C) and D)
G) B) and E)

Question 20

The owner of a small restaurant that sells take-out fried chicken and biscuits pays $2,500 in rent each month, $500 in utilities, $750 interest on his loan, insurance premium of $200, and advertising on local buses $250 a month.A bucket of take-out chicken is priced at $9.50.Unit variable costs for the bucket of chicken are $5.50.How many small buckets of chicken does the restaurant need to sell to break-even each month?

Accepted Answer

A)  988 buckets
B)  1,000 buckets
C)  1,050 buckets
D)  3,150 buckets
E)  4,200 bucketsF) C) and E)
G) C) and D)

Exam 12: Pricing Products and Services

Setting a price to achieve a profit that is a specified percentage of the sales volume is referred to as _________.

Correct Answer
verified

Factors that determine consumers' willingness and ability to pay for products and services are referred to as

Correct Answer
verified

Three different objectives relate to a firm's profit, which is often measured in terms of return on investment.One objective, known as _________, occurs when a firm sets a profit goal, usually determined by its board of directors.

Correct Answer
verified

Allowances, like discounts; refer to

Correct Answer
verified

One-price policy refers to

Correct Answer
verified

deliberately adjusting the composition and features of the product to achieve the target price to consumers, is referred to as _________.

Correct Answer
verified

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

Correct Answer
verified

Adding a fixed percentage to the cost of all items in a specific product class is referred to as

Correct Answer
verified

Target profit pricing refers to

Correct Answer
verified

FIGURE 12-4 -Position "D" in Figure 12-4 above represents the price premium of which of the following?

Correct Answer
verified

The acronym FOB stands for _________.

Correct Answer
verified

Price elasticity of demand measures how sensitive consumer demand and the firm's revenues are to changes in the product's price.Explain the difference between a product with elastic demand and a product with inelastic demand.

Correct Answer
verified
Elastic demand exists when a small perce...
View 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 it is referred to as

Correct Answer
verified

The newer a product and the earlier it is in its life cycle,

Correct Answer
verified

Geographic adjustments are made by manufacturers or wholesalers to cover

Correct Answer
verified

Correct Answer
verified

Lady Marion Seafood, Inc.sells 5-pound packages of Alaska salmon.Assume its variable costs per package is $30, and its fixed cost is $250,000.It wants a target profit of $38,000 on a volume of 16,000 packages.What should it charge for a five-pound package of salmon?

Correct Answer
verified

Correct Answer
verified

What is standard markup pricing and when would it be used?

Correct Answer
verified
Standard markup pricing entails adding a...
View Answer

Which of the following statements is most accurate?

Correct Answer
verified

Exam 12: Pricing Products and Services

Setting a price to achieve a profit that is a specified percentage of the sales volume is referred to as _________.

Correct AnswerverifiedShow Answer

Factors that determine consumers' willingness and ability to pay for products and services are referred to as

Correct AnswerverifiedShow Answer

Three different objectives relate to a firm's profit, which is often measured in terms of return on investment.One objective, known as _________, occurs when a firm sets a profit goal, usually determined by its board of directors.

Correct AnswerverifiedShow Answer

Allowances, like discounts; refer to

Correct AnswerverifiedShow Answer

One-price policy refers to

Correct AnswerverifiedShow Answer

deliberately adjusting the composition and features of the product to achieve the target price to consumers, is referred to as _________.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Adding a fixed percentage to the cost of all items in a specific product class is referred to as

Correct AnswerverifiedShow Answer

Target profit pricing refers to

Correct AnswerverifiedShow Answer

FIGURE 12-4 -Position "D" in Figure 12-4 above represents the price premium of which of the following?

Correct AnswerverifiedShow Answer

The acronym FOB stands for _________.

Correct AnswerverifiedShow Answer

Price elasticity of demand measures how sensitive consumer demand and the firm's revenues are to changes in the product's price.Explain the difference between a product with elastic demand and a product with inelastic demand.

Correct AnswerverifiedElastic demand exists when a small perce...View AnswerShow 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 it is referred to as

Correct AnswerverifiedShow Answer

The newer a product and the earlier it is in its life cycle,

Correct AnswerverifiedShow Answer

Geographic adjustments are made by manufacturers or wholesalers to cover

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Lady Marion Seafood, Inc.sells 5-pound packages of Alaska salmon.Assume its variable costs per package is $30, and its fixed cost is $250,000.It wants a target profit of $38,000 on a volume of 16,000 packages.What should it charge for a five-pound package of salmon?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What is standard markup pricing and when would it be used?

Correct AnswerverifiedStandard markup pricing entails adding a...View AnswerShow 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
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Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Elastic demand exists when a small perce...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Standard markup pricing entails adding a...
View Answer

Correct Answer
verified