Question 1

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

Question 2

negative aspect of selecting unit volume as a pricing objective is that

Accepted Answer

A)   production often cannot keep up with demand.
B)   there are increased carrying costs with extensive inventories.
C)   if price reductions are used to achieve volume objectives, it can sometimes come at the expense of profits.
D)   it can create competition between divisions within the organization itself causing conflicts over the allocation of resources.
E)   it always positively correlates with a sales revenue objective.F) D) and E)
G) C) and E)

Question 3

break-even point (BEP) = [__________ ÷ (Unit price − Unit variable cost) ].

Accepted Answer

A)   Total cost
B)   Total expense
C)   Fixed cost
D)   Unit variable cost
E)   Total number of units produced or quantityF) B) and E)
G) A) and B)

Question 4

four key factors used to estimate demand.

Accepted Answer

Of course,price is one factor.Economists...

Question 5

Which of the following would be an example of a fixed cost for a company that makes carbon monoxide monitoring systems for employees to wear that work in hazardous areas?

Accepted Answer

A)   the lithium batteries that are used in each monitor
B)   the chest harness the employee must use to wear the monitor
C)   the rent for the company's offices
D)   the free training videos that are sent to each new customer
E)   the stainless steel, water-resistant cases in which the monitors sitF) A) and B)
G) A) and C)

Question 6

competitive market situation in which one seller sets the price for a unique product is referred to as

Accepted Answer

A)   a pure monopoly.
B)   an oligopoly.
C)   monopolistic competition.
D)   pure competition.
E)   monopolistic oligopoly.F) A) and D)
G) A) and C)

Question 7

Which of the following would be an example of a constraint in Step 1 of the price-setting process?

Accepted Answer

A)   "We can rely on our reputation for our other products in the line."
B)   "Experts are predicting a surge in global demand."
C)   "We need to make allowances for large quantity orders."
D)   "We should increase the price during the holiday shopping season."
E)   "We're going to face some stiff competition."F) A) and B)
G) A) and C)

Question 8

__________ equation = (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 B)
G) A) and C)

Question 9

do consumers use price as an indicator of value?

Accepted Answer

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

Question 10

firm may forgo higher profit on sales and follow which of the following pricing objectives because it wants to recognize its stakeholder obligations?

Accepted Answer

A)   profit
B)   market share
C)   unit volume
D)   survival
E)   social responsibilityF) All of the above
G) D) and E)

Question 11

Demand factors refer to

Accepted Answer

A)   the number of consumers who can afford to purchase a product or service.
B)   the price that should be charged for a given product.
C)   consumers' willingness and ability to pay for goods and services.
D)   the number of consumers who want to purchase a product.
E)   the number of consumers who can purchase a product.F) A) and C)
G) A) and D)

Question 12

specialty-toy retailers pursue a __________ pricing objective to generate cash to ward off bankruptcy.

Accepted Answer

A)   market share
B)   survival
C)   sales revenue
D)   single product line
E)   profitF) B) and E)
G) All of the above

Question 13

continuing,concise trade-off of incremental costs against incremental revenues is referred to as

Accepted Answer

A)   break-even analysis.
B)   demand analysis.
C)   marginal analysis.
D)   cost-benefit analysis.
E)   situation analysis.F) None of the above
G) D) and E)

Question 14

Figure 13-7
-Figure 13-7 above shows that the average revenue at point "C" is

Accepted Answer

A)   $3.00.
B)   $2.50.
C)   $2.00.
D)   $1.50.
E)   $1.00.F) C) and E)
G) A) and D)

Question 15

Pricing constraints refer to

Accepted Answer

A)   barriers that must be overcome in order to set pricing objectives.
B)   competitive pricing advantages one firm has over another.
C)   different pricing strategies for each of the firm's products.
D)   factors that limit the range of prices a firm may set.
E)   barriers to entry a firm faces when launching a new product.F) A) and B)
G) A) and C)

Question 16

competitive market situation in which many sellers compete on nonprice factors is referred to as

Accepted Answer

A)   a pure monopoly.
B)   an oligopoly.
C)   pure competition.
D)   monopolistic competition.
E)   monopolistic oligopoly.F) A) and D)
G) B) and E)

Question 17

Figure 13-4
-Using Figure 13-4 above,how much price competition is likely for small coffee shops?

Accepted Answer

A)   There is almost none; the market sets the price.
B)   There are many sellers competing within a range of prices.
C)   There is generally a price leader that sets the price.
D)   Starbucks sets the price and all other coffee shops follow its lead.
E)   Price is set by the seller but regulated by the government.F) All of the above
G) B) and C)

Question 18

of the following are examples of pricing constraints EXCEPT:

Accepted Answer

A)   cost of producing the product.
B)   competitors' prices.
C)   newness of the product (stage in its life cycle) .
D)   social responsibility.
E)   demand for the product class, product, or brand.F) C) and E)
G) A) and E)

Question 19

Which of the following statements regarding a market share pricing objective is most accurate?

Accepted Answer

A)   A market share objective is often difficult for product managers since stockholders are looking for immediate dividends (return of profits)  and obtaining market share usually takes time.
B)   Although increased market share is a primary goal of some firms, others see it as a means to other ends, such as increased sales or profits.
C)   Selecting market share as a pricing objective is particularly effective if industry sales are rising.
D)   An advantage of market share as a pricing objective is that it is particularly insensitive to competitors' actions.
E)   Ironically, a market share objective is realized by raising prices in order to increase consumer confidence during the decline stage of a product's life cycle.F) A) and B)
G) B) and D)

Question 20

Susan O'Rourke hired an attorney to represent her in a court case involving an auto accident.The attorney charged O'Rourke a fee for his services.Terry Thomas needed a haircut-the local stylist charged him $12 for her services.Aaron Mathison mowed his neighbor's lawn; in exchange,the neighbor roto-tilled Mathison's garden.The attorney fees paid by O'Rourke,the $12 charged by the hair stylist,and the exchange of lawn mowing for garden tilling are all examples of

Accepted Answer

A)   premiums.
B)   barter.
C)   the profit motive.
D)   price.
E)   outlays.F) None of the above
G) D) and E)

Exam 13: Building the Price Foundation

Pricing constraints refer to

Correct Answer
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break-even point (BEP) = [__________ ÷ (Unit price − Unit variable cost) ].

Correct Answer
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Figure 13-7 -Figure 13-7 above shows that the average revenue at point "C" is

Correct Answer
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__________ equation = (Unit price × Quantity sold) − Total cost.

Correct Answer
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Which of the following would be an example of a constraint in Step 1 of the price-setting process?

Correct Answer
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competitive market situation in which many sellers compete on nonprice factors is referred to as

Correct Answer
verified

specialty-toy retailers pursue a __________ pricing objective to generate cash to ward off bankruptcy.

Correct Answer
verified

continuing,concise trade-off of incremental costs against incremental revenues is referred to as

Correct Answer
verified

do consumers use price as an indicator of value?

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

Correct Answer
verified

four key factors used to estimate demand.

Correct Answer
verified
Of course,price is one factor.Economists...
View Answer

Variable cost refers to

Correct Answer
verified

negative aspect of selecting unit volume as a pricing objective is that

Correct Answer
verified

Which of the following would be an example of a fixed cost for a company that makes carbon monoxide monitoring systems for employees to wear that work in hazardous areas?

Correct Answer
verified

Which of the following statements regarding a market share pricing objective is most accurate?

Correct Answer
verified

of the following are examples of pricing constraints EXCEPT:

Correct Answer
verified

firm may forgo higher profit on sales and follow which of the following pricing objectives because it wants to recognize its stakeholder obligations?

Correct Answer
verified

Demand factors refer to

Correct Answer
verified

competitive market situation in which one seller sets the price for a unique product is referred to as

Correct Answer
verified

Figure 13-4 -Using Figure 13-4 above,how much price competition is likely for small coffee shops?

Correct Answer
verified

Exam 13: Building the Price Foundation

Pricing constraints refer to

Correct AnswerverifiedShow Answer

break-even point (BEP) = [__________ ÷ (Unit price − Unit variable cost) ].

Correct AnswerverifiedShow Answer

Figure 13-7 -Figure 13-7 above shows that the average revenue at point "C" is

Correct AnswerverifiedShow Answer

__________ equation = (Unit price × Quantity sold) − Total cost.

Correct AnswerverifiedShow Answer

Which of the following would be an example of a constraint in Step 1 of the price-setting process?

Correct AnswerverifiedShow Answer

competitive market situation in which many sellers compete on nonprice factors is referred to as

Correct AnswerverifiedShow Answer

specialty-toy retailers pursue a __________ pricing objective to generate cash to ward off bankruptcy.

Correct AnswerverifiedShow Answer

continuing,concise trade-off of incremental costs against incremental revenues is referred to as

Correct AnswerverifiedShow Answer

do consumers use price as an indicator of value?

Correct AnswerverifiedFrom a consumer's standpoint,price is of...View AnswerShow Answer

Correct AnswerverifiedShow Answer

four key factors used to estimate demand.

Correct AnswerverifiedOf course,price is one factor.Economists...View AnswerShow Answer

Variable cost refers to

Correct AnswerverifiedShow Answer

negative aspect of selecting unit volume as a pricing objective is that

Correct AnswerverifiedShow Answer

Which of the following would be an example of a fixed cost for a company that makes carbon monoxide monitoring systems for employees to wear that work in hazardous areas?

Correct AnswerverifiedShow Answer

Which of the following statements regarding a market share pricing objective is most accurate?

Correct AnswerverifiedShow Answer

of the following are examples of pricing constraints EXCEPT:

Correct AnswerverifiedShow Answer

firm may forgo higher profit on sales and follow which of the following pricing objectives because it wants to recognize its stakeholder obligations?

Correct AnswerverifiedShow Answer

Demand factors refer to

Correct AnswerverifiedShow Answer

competitive market situation in which one seller sets the price for a unique product is referred to as

Correct AnswerverifiedShow Answer

Figure 13-4 -Using Figure 13-4 above,how much price competition is likely for small coffee shops?

Correct AnswerverifiedShow Answer

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

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Of course,price is one factor.Economists...
View Answer

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