Question 1

The retail price of a sweater is $75, and the initial markup is 51 percent. Calculate the cost of the product.

Accepted Answer

A)  $33.75 
B)  $25.71 
C)  $28.50 
D)  $36.75 
E)  $42.85 
A)  $33.75 
B)  $25.71 
C)  $28.50 
D)  $36.75 
E)  $42.85

Question 2

Which of the following statements on markdowns is False?

Accepted Answer

A)  Markdowns are an unnecessary part of business if planned correctly. 
B)  Markdowns are an opportunity to increase sales. 
C)  Promotional markdowns increase customer flow. 
D)  If markdowns are too low, the buyer may be not purchasing enough merchandise. 
E)  If markdowns are too low, the buyer may be pricing their merchandise too low. 
A)  Markdowns are an unnecessary part of business if planned correctly. 
B)  Markdowns are an opportunity to increase sales. 
C)  Promotional markdowns increase customer flow. 
D)  If markdowns are too low, the buyer may be not purchasing enough merchandise. 
E)  If markdowns are too low, the buyer may be pricing their merchandise too low.

Question 3

A travel brochure shows that a couple can buy a round trip ticket to Orlando, a three-day pass to Disney World, car rental for four days, and hotel accommodations for 5 nights for $1200 per person. These services are more expensive when availed individually. This offer is an example of

Accepted Answer

A)  price lining. 
B)  psychological pricing. 
C)  bait and switch bundling. 
D)  price bundling. 
E)  conjoint pricing. 
A)  price lining. 
B)  psychological pricing. 
C)  bait and switch bundling. 
D)  price bundling. 
E)  conjoint pricing.

Question 4

Buyers generally do not plan for markdowns.

Accepted Answer

A) True 
 B)False

Question 5

How are retailers affected by scanning errors? What are the measures taken to minimize these errors?

Accepted Answer

In general, retailers lose money from sc

Question 6

What are the strengths of operating with a high/low pricing strategy?

Accepted Answer

The high/low pricing strategy

Question 7

How can a retailer that wants to use an EDLP strategy persuade customers away from high/low strategy competitors?

Accepted Answer

A)  By using price lining 
B)  By using a demand-oriented method for setting retail prices 
C)  By assuring customers of low prices 
D)  By refusing to accept manufacturers' coupons 
E)  By increasing advertising 
A)  By using price lining 
B)  By using a demand-oriented method for setting retail prices 
C)  By assuring customers of low prices 
D)  By refusing to accept manufacturers' coupons 
E)  By increasing advertising

Question 8

Retailers using a(n) ________ strategy frequently-often weekly-discount the initial prices for merchandise through sales promotions.

Accepted Answer

A)  disintermediated pricing 
B)  penetration pricing 
C)  high/low pricing 
D)  price skimming 
E)  everyday low-pricing 
A)  disintermediated pricing 
B)  penetration pricing 
C)  high/low pricing 
D)  price skimming 
E)  everyday low-pricing

Question 9

Which of the following is an example of a fixed cost for a bridal gown shop?

Accepted Answer

A)  The services of the seamstress to fit each gown 
B)  The cost associated with dying the shoes to match the bridesmaids' dresses 
C)  The cost associated with the layaway of variously priced gowns 
D)  The cost of the mannequin used to display current gowns 
E)  The cost associated with a generous return policy 
A)  The services of the seamstress to fit each gown 
B)  The cost associated with dying the shoes to match the bridesmaids' dresses 
C)  The cost associated with the layaway of variously priced gowns 
D)  The cost of the mannequin used to display current gowns 
E)  The cost associated with a generous return policy

Question 10

Which of the following statements is a limitation of the rule-based approach to taking markdowns?

Accepted Answer

A)  The rule-based approach is based upon gross margin. 
B)  The approach prohibits input from the vendor. 
C)  The approach does not follow a fixed schedule. 
D)  It does not consider the demand for merchandise at different price points. 
E)  The approach assumes that items in a category do not exhibit the same behavior. 
A)  The rule-based approach is based upon gross margin. 
B)  The approach prohibits input from the vendor. 
C)  The approach does not follow a fixed schedule. 
D)  It does not consider the demand for merchandise at different price points. 
E)  The approach assumes that items in a category do not exhibit the same behavior.

Question 11

Which of the following factors influences reductions?

Accepted Answer

A)  The cost of alterations 
B)  The amount subtracted from the gross margin 
C)  Theft and accounting errors 
D)  Tax write-off for corporate volunteer hours 
E)  Format of saving for low profit quarters 
A)  The cost of alterations 
B)  The amount subtracted from the gross margin 
C)  Theft and accounting errors 
D)  Tax write-off for corporate volunteer hours 
E)  Format of saving for low profit quarters

Question 12

Retailers collect price data about their competitors to

Accepted Answer

A)  see if they need to adjust their prices. 
B)  match supply and demand. 
C)  maximize their sales and profits by means of yield management. 
D)  assess the quality of services provided. 
E)  determine service quality. 
A)  see if they need to adjust their prices. 
B)  match supply and demand. 
C)  maximize their sales and profits by means of yield management. 
D)  assess the quality of services provided. 
E)  determine service quality.

Question 13

________ refers to charging different prices for different stores, markets, or regions.

Accepted Answer

A)  Zone pricing 
B)  Geofencing 
C)  Price lining 
D)  Price optimization 
E)  Odd pricing 
A)  Zone pricing 
B)  Geofencing 
C)  Price lining 
D)  Price optimization 
E)  Odd pricing

Question 14

Which of the following is an example of a variable cost for a retailer of electronic equipment?

Accepted Answer

A)  The display tables for mounting the computer, monitor, and printer 
B)  The cost associated with the free pack of paper for every computer printer sold 
C)  The store rent charged by the mall 
D)  The cost of obtaining the licenses required by the local government 
E)  The cost of manufacturing the electronic equipment 
A)  The display tables for mounting the computer, monitor, and printer 
B)  The cost associated with the free pack of paper for every computer printer sold 
C)  The store rent charged by the mall 
D)  The cost of obtaining the licenses required by the local government 
E)  The cost of manufacturing the electronic equipment

Question 15

Periodic price audits are completed at retail stores to ensure that the

Accepted Answer

A)  prices are high enough to cover costs. 
B)  prices are lower than the competition. 
C)  extent and cause of scanning errors are identified. 
D)  product is priced consistent with the company's pricing policy. 
E)  retailer is not engaging in horizontal price fixing. 
A)  prices are high enough to cover costs. 
B)  prices are lower than the competition. 
C)  extent and cause of scanning errors are identified. 
D)  product is priced consistent with the company's pricing policy. 
E)  retailer is not engaging in horizontal price fixing.

Question 16

Which of the following is set by vendors by withholding benefits such as cooperative advertising or even refusing to deliver merchandise to noncomplying retailers?

Accepted Answer

A)  Predatory pricing 
B)  Horizontal pricing 
C)  Bait and switch 
D)  Vertical pricing 
E)  MSRP pricing 
A)  Predatory pricing 
B)  Horizontal pricing 
C)  Bait and switch 
D)  Vertical pricing 
E)  MSRP pricing

Question 17

Cliff is struggling with the price of produce at his well-established produce markets. The reputation of the markets attracts repeat customers from a 50-mile radius. Recently, local farmers started increasing produce prices for him due to the upsurge in gas prices. Now, Cliff feels it is time to pass the costs onto his customers. Which of the following should Cliff estimate to determine the effect of price changes?

Accepted Answer

A)  Price elasticity 
B)  Break-even point quantity 
C)  Fixed costs 
D)  Reference price 
E)  Markup percentage 
A)  Price elasticity 
B)  Break-even point quantity 
C)  Fixed costs 
D)  Reference price 
E)  Markup percentage

Question 18

A bookstore is considering stocking a limited edition of Alice in Wonderland dolls at a cost of $125 each. The manager calculated the retail price with an initial markup percentage of 48 percent and plans to ticket the product with a ".00" ending. What would be the initial retail price on the doll?

Accepted Answer

A)  $180 
B)  $190 
C)  $240 
D)  $280 
E)  $63 
A)  $180 
B)  $190 
C)  $240 
D)  $280 
E)  $63

Question 19

Which of the following statements is not True of markdowns?

Accepted Answer

A)  Markdowns are part of the cost of doing business, and thus buyers plan for them. 
B)  A buyer's objective is to minimize markdowns. 
C)  Retailers have a set of arbitrary rules for taking markdowns. 
D)  Buyers employ markdowns to promote merchandise and increase sales. 
E)  Markdowns can increase customer traffic flow. 
A)  Markdowns are part of the cost of doing business, and thus buyers plan for them. 
B)  A buyer's objective is to minimize markdowns. 
C)  Retailers have a set of arbitrary rules for taking markdowns. 
D)  Buyers employ markdowns to promote merchandise and increase sales. 
E)  Markdowns can increase customer traffic flow.

Question 20

What is the potential byproduct of promotional markdowns?

Accepted Answer

A)  It is a way of achieving a break-even point. 
B)  Promotional markdowns benefit customers because they are charged according to their willingness to pay. 
C)  Retailers aim to get rid of unwanted merchandise through promotional markdowns. 
D)  The increased in-store traffic can lead to the purchase of other products at regular prices. 
E)  Buyers are benefitted because they are charged according to the market segment to which they belong. 
A)  It is a way of achieving a break-even point. 
B)  Promotional markdowns benefit customers because they are charged according to their willingness to pay. 
C)  Retailers aim to get rid of unwanted merchandise through promotional markdowns. 
D)  The increased in-store traffic can lead to the purchase of other products at regular prices. 
E)  Buyers are benefitted because they are charged according to the market segment to which they belong.

The retail price of a sweater is $75, and the initial markup is 51 percent. Calculate the cost of the product.

Which of the following statements on markdowns is False?

A travel brochure shows that a couple can buy a round trip ticket to Orlando, a three-day pass to Disney World, car rental for four days, and hotel accommodations for 5 nights for $1200 per person. These services are more expensive when availed individually. This offer is an example of

Buyers generally do not plan for markdowns.

How are retailers affected by scanning errors? What are the measures taken to minimize these errors?

What are the strengths of operating with a high/low pricing strategy?

How can a retailer that wants to use an EDLP strategy persuade customers away from high/low strategy competitors?

Retailers using a(n) ________ strategy frequently-often weekly-discount the initial prices for merchandise through sales promotions.

Which of the following is an example of a fixed cost for a bridal gown shop?

Which of the following statements is a limitation of the rule-based approach to taking markdowns?

Which of the following factors influences reductions?

Retailers collect price data about their competitors to

________ refers to charging different prices for different stores, markets, or regions.

Which of the following is an example of a variable cost for a retailer of electronic equipment?

Periodic price audits are completed at retail stores to ensure that the

Which of the following is set by vendors by withholding benefits such as cooperative advertising or even refusing to deliver merchandise to noncomplying retailers?

A bookstore is considering stocking a limited edition of Alice in Wonderland dolls at a cost of $125 each. The manager calculated the retail price with an initial markup percentage of 48 percent and plans to ticket the product with a ".00" ending. What would be the initial retail price on the doll?

Which of the following statements is not True of markdowns?

What is the potential byproduct of promotional markdowns?

Introduction to the World of Retailing

Types of Retailers

Multichannel and Omnichannel Retailing

Customer Buying Behavior

Retail Market Strategy

Financial Strategy

Retail Locations

Retail Site Location

Information Systems and Supply Chain Management

Customer Relationship Management

Managing the Merchandise Planning Process

Buying Merchandise

Retail Communication Mix

Human Resources and Managing the Store

Store Layout, Design, and Visual Merchandising

Customer Service

Filters

Exam 13: Retail Pricing

The retail price of a sweater is $75, and the initial markup is 51 percent. Calculate the cost of the product.

Which of the following statements on markdowns is False?

A travel brochure shows that a couple can buy a round trip ticket to Orlando, a three-day pass to Disney World, car rental for four days, and hotel accommodations for 5 nights for $1200 per person. These services are more expensive when availed individually. This offer is an example of

Buyers generally do not plan for markdowns.

How are retailers affected by scanning errors? What are the measures taken to minimize these errors?

What are the strengths of operating with a high/low pricing strategy?

How can a retailer that wants to use an EDLP strategy persuade customers away from high/low strategy competitors?

Retailers using a(n) ________ strategy frequently-often weekly-discount the initial prices for merchandise through sales promotions.

Which of the following is an example of a fixed cost for a bridal gown shop?

Which of the following statements is a limitation of the rule-based approach to taking markdowns?

Which of the following factors influences reductions?

Retailers collect price data about their competitors to

________ refers to charging different prices for different stores, markets, or regions.

Which of the following is an example of a variable cost for a retailer of electronic equipment?

Periodic price audits are completed at retail stores to ensure that the

Which of the following is set by vendors by withholding benefits such as cooperative advertising or even refusing to deliver merchandise to noncomplying retailers?

A bookstore is considering stocking a limited edition of Alice in Wonderland dolls at a cost of $125 each. The manager calculated the retail price with an initial markup percentage of 48 percent and plans to ticket the product with a ".00" ending. What would be the initial retail price on the doll?

Which of the following statements is not True of markdowns?

What is the potential byproduct of promotional markdowns?

Introduction to the World of Retailing

Types of Retailers

Multichannel and Omnichannel Retailing

Customer Buying Behavior

Retail Market Strategy

Financial Strategy

Retail Locations

Retail Site Location

Information Systems and Supply Chain Management

Customer Relationship Management

Managing the Merchandise Planning Process

Buying Merchandise

Retail Communication Mix

Human Resources and Managing the Store

Store Layout, Design, and Visual Merchandising

Customer Service

Filters