Question 1

As production moves up, the average cost per unit decreases because ________.

Accepted Answer

A)  variable costs decrease 
B)  of increasing diseconomies of scale 
C)  fixed costs are spread over more units 
D)  overhead costs decrease 
E)  revenue increases 
A)  variable costs decrease 
B)  of increasing diseconomies of scale 
C)  fixed costs are spread over more units 
D)  overhead costs decrease 
E)  revenue increases

Question 2

Define total costs.

Accepted Answer

Total costs are the

Question 3

The total production costs at Kellner Machine Works are $87,000 out of which $45,000 represent fixed costs. Which of the following is representative of the variable costs incurred by the company?

Accepted Answer

A)  $35,000 
B)  $42,000 
C)  $45,000 
D)  $87,000 
E)  $132,000 
A)  $35,000 
B)  $42,000 
C)  $45,000 
D)  $87,000 
E)  $132,000

Question 4

When companies set prices, the government and social concerns are ________ affecting pricing decisions.

Accepted Answer

A)  external factors 
B)  internal factors 
C)  economic factors 
D)  cultural factors 
E)  organizational factors 
A)  external factors 
B)  internal factors 
C)  economic factors 
D)  cultural factors 
E)  organizational factors

Question 5

In which situation is the market dominated by one seller?

Accepted Answer

A)  pure monopoly 
B)  monopolistic competition 
C)  oligopolistic competition 
D)  pure competition 
E)  free market 
A)  pure monopoly 
B)  monopolistic competition 
C)  oligopolistic competition 
D)  pure competition 
E)  free market

Question 6

Which of the following statements about break-even analysis is true?

Accepted Answer

A)  It is used to determine how much production experience a company must have in order to achieve desired efficiencies. 
B)  It is a technique used to calculate fixed costs. 
C)  It determines the amount of retained earnings a company will have during a given accounting period. 
D)  It is a technique marketers use to determine the relationship between supply and demand. 
E)  It is calculated by using variable costs, the unit price, and fixed costs. 
A)  It is used to determine how much production experience a company must have in order to achieve desired efficiencies. 
B)  It is a technique used to calculate fixed costs. 
C)  It determines the amount of retained earnings a company will have during a given accounting period. 
D)  It is a technique marketers use to determine the relationship between supply and demand. 
E)  It is calculated by using variable costs, the unit price, and fixed costs.

Question 7

Explain price elasticity. What determines the elasticity of demand?

Accepted Answer

Price elasticity refers to a measure of

Question 8

Using value-based pricing, a marketer would not design a product and marketing program before setting the price.

Accepted Answer

A) True 
 B)False

Question 9

Retailers such as Costco and Walmart charge a constant, daily low price with few or no temporary price discounts. This is an example of ________.

Accepted Answer

A)  competition-based pricing 
B)  everyday low pricing 
C)  cost-plus pricing 
D)  break-even pricing 
E)  penetration pricing 
A)  competition-based pricing 
B)  everyday low pricing 
C)  cost-plus pricing 
D)  break-even pricing 
E)  penetration pricing

Question 10

Which of the following is most likely a fixed cost?

Accepted Answer

A)  sales representative commissions 
B)  product distribution costs 
C)  manufacturing input costs 
D)  temporary worker salaries 
E)  facility rental payments 
A)  sales representative commissions 
B)  product distribution costs 
C)  manufacturing input costs 
D)  temporary worker salaries 
E)  facility rental payments

Question 11

Briefly describe the process of value-based pricing.

Accepted Answer

The company first assesses customer need

Question 12

Herbie Inc., a firm manufacturing sandwich makers, has fixed costs of $250,000, variable costs of $20 per unit of output, and expected unit sales of 50,000 units. What is the unit cost of a sandwich maker manufactured by Herbie?

Accepted Answer

A)  $15 
B)  $25 
C)  $30 
D)  $50 
E)  $75 
A)  $15 
B)  $25 
C)  $30 
D)  $50 
E)  $75

Question 13

What sets the floor for product prices?

Accepted Answer

A)  consumer perceptions of the product's value 
B)  product costs 
C)  competitors' strategies 
D)  advertising budgets 
E)  market competition 
A)  consumer perceptions of the product's value 
B)  product costs 
C)  competitors' strategies 
D)  advertising budgets 
E)  market competition

Question 14

PoolPak produces climate-control systems for large swimming pools. The company's customers are more concerned about service support for maintaining their systems than the initial price of the product. PoolPak specializes in and differentiates itself through both cutting-edge technologies used to build its high-value climate control systems as well as seamless quality service. PoolPak's prices are very high, but demand for its climate-control systems seems to be forever on the rise. This exemplifies ________.

Accepted Answer

A)  target costing 
B)  a pure monopoly 
C)  cost-plus pricing 
D)  a nonprice position 
E)  break-even pricing 
A)  target costing 
B)  a pure monopoly 
C)  cost-plus pricing 
D)  a nonprice position 
E)  break-even pricing

Question 15

Which of the following shows the number of units the market will buy in a given time period, at different prices that might be charged?

Accepted Answer

A)  demand curve 
B)  supply curve 
C)  learning curve 
D)  break-even pricing 
E)  target costing 
A)  demand curve 
B)  supply curve 
C)  learning curve 
D)  break-even pricing 
E)  target costing

Question 16

A cell phone manufacturing firm produced 1,000 cell phones a day but believed that it could reasonably step up production to 2,000 cell phones a day. Consequently, it built a larger plant and installed efficient machineries and work arrangements to realize the projected output. Which of the following can most likely be inferred from this information?

Accepted Answer

A)  The unit cost of producing 2,000 cell phones per day would be twice that of the unit cost of producing 1,000 units per day. 
B)  A production plant with the capacity of producing 5,000 cell phones a day would be most efficient. 
C)  The unit cost of producing 2,000 cell phones per day would be lower than the unit cost of producing 1,000 units per day. 
D)  A 2,000-capacity production plant would be less efficient because of increasing diseconomies of scale. 
E)  The fixed costs of the firm are more likely to increase with the increase in output. 
A)  The unit cost of producing 2,000 cell phones per day would be twice that of the unit cost of producing 1,000 units per day. 
B)  A production plant with the capacity of producing 5,000 cell phones a day would be most efficient. 
C)  The unit cost of producing 2,000 cell phones per day would be lower than the unit cost of producing 1,000 units per day. 
D)  A 2,000-capacity production plant would be less efficient because of increasing diseconomies of scale. 
E)  The fixed costs of the firm are more likely to increase with the increase in output.

Question 17

A demand curve shows the number of units the market will buy in a given time period at different prices that might be charged.

Accepted Answer

A) True 
 B)False

Question 18

Experience-curve pricing assumes that ________.

Accepted Answer

A)  competitors are weak and not willing to fight price cuts 
B)  competitors are strong and invincible 
C)  aggressive pricing adversely affects product image 
D)  volume-based production slows down organizational learning 
E)  lower-cost technologies are almost always inferior 
A)  competitors are weak and not willing to fight price cuts 
B)  competitors are strong and invincible 
C)  aggressive pricing adversely affects product image 
D)  volume-based production slows down organizational learning 
E)  lower-cost technologies are almost always inferior

Question 19

Which of the following is true with regard to pure competition?

Accepted Answer

A)  Under pure competition, no single buyer or seller has much effect on the going market price. 
B)  In a purely competitive market, marketing research is of utmost importance. 
C)  In a purely competitive market, product development is the focus of most firms. 
D)  Under pure competition, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price. 
E)  Under pure competition, the market consists of only a few large sellers. 
A)  Under pure competition, no single buyer or seller has much effect on the going market price. 
B)  In a purely competitive market, marketing research is of utmost importance. 
C)  In a purely competitive market, product development is the focus of most firms. 
D)  Under pure competition, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price. 
E)  Under pure competition, the market consists of only a few large sellers.

Question 20

List some important characteristics of price.

Accepted Answer

Price is the only element in the marketi

As production moves up, the average cost per unit decreases because ________.

Define total costs.

The total production costs at Kellner Machine Works are $87,000 out of which $45,000 represent fixed costs. Which of the following is representative of the variable costs incurred by the company?

When companies set prices, the government and social concerns are ________ affecting pricing decisions.

In which situation is the market dominated by one seller?

Which of the following statements about break-even analysis is true?

Explain price elasticity. What determines the elasticity of demand?

Using value-based pricing, a marketer would not design a product and marketing program before setting the price.

Retailers such as Costco and Walmart charge a constant, daily low price with few or no temporary price discounts. This is an example of ________.

Which of the following is most likely a fixed cost?

Briefly describe the process of value-based pricing.

Herbie Inc., a firm manufacturing sandwich makers, has fixed costs of $250,000, variable costs of $20 per unit of output, and expected unit sales of 50,000 units. What is the unit cost of a sandwich maker manufactured by Herbie?

What sets the floor for product prices?

Which of the following shows the number of units the market will buy in a given time period, at different prices that might be charged?

A demand curve shows the number of units the market will buy in a given time period at different prices that might be charged.

Experience-curve pricing assumes that ________.

Which of the following is true with regard to pure competition?

List some important characteristics of price.

Marketing: Creating and Capturing Customer Value

Company and Marketing Strategy: Partnering to Build Customer Relationships

Analyzing the Marketing Environment

Managing Marketing Information to Gain Customer Insights

Consumer Markets and Consumer Buyer Behavior

Business Markets and Business Buyer Behavior

Customer-Driven Marketing Strategy: Creating Value for Target Customers

Products, Services, and Brands: Building Customer Value

New-Product Development and Product Life Cycle Strategies

Pricing Strategies: Additional Considerations

Marketing Channels: Delivering Customer Value

Retailing and Wholesaling

Communicating Customer Value: Integrated Marketing Communications Strategy

Advertising and Public Relations

Personal Selling and Sales Promotion

Direct and Online Marketing: Building Direct Customer Relationships

Creating Competitive Advantage

The Global Marketplace

Sustainable Marketing: Social Responsibility and Ethics

Filters

Exam 10: Pricing: Understanding and Capturing Customer Value

As production moves up, the average cost per unit decreases because ________.

Define total costs.

The total production costs at Kellner Machine Works are $87,000 out of which $45,000 represent fixed costs. Which of the following is representative of the variable costs incurred by the company?

When companies set prices, the government and social concerns are ________ affecting pricing decisions.

In which situation is the market dominated by one seller?

Which of the following statements about break-even analysis is true?

Explain price elasticity. What determines the elasticity of demand?

Using value-based pricing, a marketer would not design a product and marketing program before setting the price.

Retailers such as Costco and Walmart charge a constant, daily low price with few or no temporary price discounts. This is an example of ________.

Which of the following is most likely a fixed cost?

Briefly describe the process of value-based pricing.

Herbie Inc., a firm manufacturing sandwich makers, has fixed costs of $250,000, variable costs of $20 per unit of output, and expected unit sales of 50,000 units. What is the unit cost of a sandwich maker manufactured by Herbie?

What sets the floor for product prices?

Which of the following shows the number of units the market will buy in a given time period, at different prices that might be charged?

A demand curve shows the number of units the market will buy in a given time period at different prices that might be charged.

Experience-curve pricing assumes that ________.

Which of the following is true with regard to pure competition?

List some important characteristics of price.

Marketing: Creating and Capturing Customer Value

Company and Marketing Strategy: Partnering to Build Customer Relationships

Analyzing the Marketing Environment

Managing Marketing Information to Gain Customer Insights

Consumer Markets and Consumer Buyer Behavior

Business Markets and Business Buyer Behavior

Customer-Driven Marketing Strategy: Creating Value for Target Customers

Products, Services, and Brands: Building Customer Value

New-Product Development and Product Life Cycle Strategies

Pricing Strategies: Additional Considerations

Marketing Channels: Delivering Customer Value

Retailing and Wholesaling

Communicating Customer Value: Integrated Marketing Communications Strategy

Advertising and Public Relations

Personal Selling and Sales Promotion

Direct and Online Marketing: Building Direct Customer Relationships

Creating Competitive Advantage

The Global Marketplace

Sustainable Marketing: Social Responsibility and Ethics

Filters