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Odd-even pricing is most closely related to


A) retailers' perceptions of price.
B) customers' perceptions of price.
C) wholesalers' markups.
D) manufacturers' costs.
E) cost-of-product facilitation-to-market.

F) A) and B)
G) A) and C)

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The sum of fixed costs plus variable costs is referred to as


A) break-even point.
B) net revenue.
C) marginal cost.
D) inelastic cost.
E) total cost.

F) A) and B)
G) A) and C)

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The percentage change in quantity demanded relative to the percentage change in price is referred to as


A) marginal revenue.
B) price elasticity of demand.
C) average demand.
D) marginal demand.
E) demand shift.

F) C) and D)
G) A) and D)

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Flexible-price policy refers to


A) setting the price of a line of products at a number of different specific pricing points.
B) 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.
C) setting different prices for products and services depending on individual buyers and purchase situations.
D) deliberately selling a product below its customary price, not to increase sales, but to attract customers' attention in hopes that they will buy other products as well.
E) adding a fixed percentage to the cost of all items in a specific product class.

F) B) and D)
G) B) and C)

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A recently graduated business student decided to open a small internet cafe serving a variety of unusual non-alcoholic beverages from around the world.He carefully used all the pricing formulas he learned in school and set a goal to break even the first six months and make a moderate profit for the next six months at which time he would review his pricing strategies.Within a week after opening, every seat was filled and he had to replenish his beverage orders several times.At his six month review, he was devastated to find that despite huge sales, he had actually lost money.He realized it wasn't his "math" that was wrong, he had simply failed to include items such as toilet paper, paper towels, hand soap, and trash removal fees in his calculations.These costs should have appeared as __________ in his break-even analysis.


A) fixed costs
B) marginal costs
C) variable costs
D) overhead costs
E) ancillary costs

F) C) and D)
G) All of the above

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What are the six major steps involved in setting prices?

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1.Identify pricing objectives and constr...

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Which of the following statements regarding cost-oriented approaches is most accurate?


A) These methods focus on the demand side of the pricing problem; they involve stimulating demand and decreasing revenue.
B) These methods focus on the cost side of the pricing problem; they involve considerations of production and marketing expenses.
C) Target return on investment is an example of a cost-oriented method.
D) Experience curve pricing is simple to use because costs predictably decrease by 25 percent with each doubling of production.
E) Cost-oriented approaches are subcategories of competition-oriented methods so revenues are a critical factor.

F) B) and D)
G) A) and D)

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To encourage retailers to pay their bills quickly, manufacturers offer them


A) quantity discounts.
B) flexible pricing policies.
C) promotional allowances.
D) cash discounts.
E) manufacturers' inducements.

F) B) and E)
G) B) and D)

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Ace Shoe Company sells heel replacement kits for men's shoes.It has fixed costs of $6 million and unit variable costs of $5 per pair.Ace would like to earn a profit of $2 million; how many pairs must they sell at a price of $15?


A) 100,000 kits
B) 200,000 kits
C) 600,000 kits
D) 800,000 kits
E) 1,400,000 kits Ace Shoe Company sells heel replacement kits for men's shoes.It has fixed costs of $6 million and unit variable costs of $5 per pair.Ace would like to earn a profit of $2 million; how many pairs must they sell at a price of $15? A) 100,000 kits B) 200,000 kits C) 600,000 kits D) 800,000 kits E) 1,400,000 kits

F) A) and D)
G) A) and C)

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Inelastic demand exists when a(n)


A) a small percentage decrease in price produces a smaller percentage increase in quantity demanded and total revenue falls.
B) a small increase or decrease in price will not significantly affect the demand, or units sold.
C) a small percentage decrease in price produces a larger percentage increase in quantity demanded and total revenue increases.
D) an increase in price causes a larger increase in quantity demanded and total revenue falls to zero.
E) a small percentage decrease in price produces a smaller percentage decrease in quantity demanded and total revenue increases.

F) A) and E)
G) C) and D)

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Uniform delivered pricing refers to


A) the price the seller quotes that includes all transportation costs.
B) the price the seller quotes excluding all transportation costs.
C) the price the seller quotes including a fixed allowance whereby the buyer pays any additional costs.
D) the price the seller quotes includes a fixed percentage of transportation costs for which they will be responsible.
E) the guarantee that a retailer will be charged the same transportation fee for all of their outlets regardless of where they are located.

F) A) and C)
G) None of the above

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Standard markup pricing is frequently used by managers of supermarkets because it is particularly suited to situations when


A) there is a large line of products all with basically the same product attributes.
B) there is a large number of products and estimating demand for each would be difficult and time consuming.
C) you have a specific profit goal you need to obtain by a specific date.
D) you have a policy of selling every item in your line at the same price regardless of product class.
E) your products are time sensitive especially to seasons or holidays.

F) B) and E)
G) B) and D)

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In the process of setting price, a marketer must first identify pricing objectives and constraints.Next, in Step 2 three specific estimates are necessary.What are they?

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The three key items in Step 2 ...

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Which of the following pricing techniques is most sensitive to customers' responses to price?


A) cost-plus percentage-of-cost pricing
B) experience curve pricing
C) cost-plus fixed-fee pricing
D) standard markup pricing
E) target pricing

F) A) and B)
G) B) and D)

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FIGURE 12-4 FIGURE 12-4 -Position E in Figure 12-4 above represents the price premium of which of the following? A) Crunch 'n Munch B) Cracker Jack C) Fiddle Faddle D) Private Brands E) Seasonal, specialty, and regional brands -Position "E" in Figure 12-4 above represents the price premium of which of the following?


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

F) B) and E)
G) A) and B)

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Elastic demand exists when a(n)


A) a small percentage decrease in price produces a smaller percentage increase in quantity demanded and total revenue falls.
B) a small percentage decrease in price produces a larger percentage increase in quantity demanded and total revenue increases.
C) an increase in price causes a larger increase in quantity demanded and total revenue falls to zero.
D) the quantity demanded remains the same regardless of level of price and total revenue is unchanged.
E) a small percentage decrease in price produces a smaller percentage decrease in quantity demanded and total revenue increases.

F) A) and E)
G) None of the above

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Cost-plus pricing refers to


A) setting the price of a line of products at a number of different price points.
B) adding a fixed percentage to the cost of all items in a specific product class.
C) summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at the price.
D) setting prices to achieve a profit that is a specified percentage of the sales volume.
E) increasing the price slightly to protect against undue profit losses from unforeseen environmental factors.

F) B) and E)
G) A) and C)

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The two general methods for quoting prices related to transportation costs are uniformed delivered pricing and _________.


A) regional index pricing
B) flexible scale pricing
C) unitary pricing
D) FOB origin pricing
E) FOB destination pricing

F) A) and E)
G) A) and D)

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A critical assumption when using target profit pricing is that


A) a higher average price will not cause the demand to fall.
B) a higher average price will usually cause the demand to fall.
C) a higher average price will always cause the demand to fall.
D) profit is relative to the current value of the dollar so this form of pricing is extremely risky.
E) if you increase your average price, all of your competitors will do the same, so being first will be essential.

F) A) and D)
G) A) and C)

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The acronym EDLP stands for _________.


A) enable discount for laggard products
B) extended discount for loss-leader products
C) extended delivery for lower pricing
D) everyday low pricing
E) exchange delivery for lower pricing

F) A) and E)
G) D) and E)

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