Question 1

Break-even analysis:

Accepted Answer

A)  is especially useful in firms whose unit costs fluctuate frequently. 
B)  graphically illustrates market demand at various prices. 
C)  should never be used as a pricing tool. 
D)  can be helpful in the short-run if the firm has reasonably stable demand and costs. 
E)  is useful only as a long-term pricing strategy. 
A)  is especially useful in firms whose unit costs fluctuate frequently. 
B)  graphically illustrates market demand at various prices. 
C)  should never be used as a pricing tool. 
D)  can be helpful in the short-run if the firm has reasonably stable demand and costs. 
E)  is useful only as a long-term pricing strategy.

Question 2

_____ is the cost of producing and selling one more unit.

Accepted Answer

A)  Average cost 
B)  Contribution margin 
C)  Marginal cost 
D)  Breakeven point 
E)  Gross cost 
A)  Average cost 
B)  Contribution margin 
C)  Marginal cost 
D)  Breakeven point 
E)  Gross cost

Question 3

After Tina got highlights put in her hair, she reached in her wallet and handed the hair stylist a $50 bill. In the town where she used to live, fifty dollars would have paid for the highlights, tipped the stylist handsomely, and gotten her $5 in change. She was very much surprised when the stylist asked her for another $10. Patrice's _____ differed from the actual price.

Accepted Answer

A)  marginal price 
B)  base price 
C)  cost-plus price 
D)  expected price 
E)  value-added perception 
A)  marginal price 
B)  base price 
C)  cost-plus price 
D)  expected price 
E)  value-added perception

Question 4

When Kalani went to buy a silk blouse for his wife, he decided to go to an upscale boutique and look for one. He was amazed when he entered the store. It looked more like an elegant living room where someone had casually arranged a few items of clothing in strategic locations. The sales clerk greeted Kalani by asking if would he like a cup of coffee and a freshly baked cookie. Before Kalani left, he had spent $200 for a blouse. The price seemed appropriate to Kalani because he perceived a strong relationship between price and:

Accepted Answer

A)  demand. 
B)  supply. 
C)  promotion 
D)  product quality. 
E)  resource accumulation. 
A)  demand. 
B)  supply. 
C)  promotion 
D)  product quality. 
E)  resource accumulation.

Question 5

Which of the following statements about a profit-maximization pricing goal is True?

Accepted Answer

A)  A profit maximization goal should never be attempted when a company is trying to market in a new geographic area. 
B)  A profit maximization goal should maximize profit on every single item. 
C)  Public opinion seldom has any effect on profit-maximization goals. 
D)  To provide efficient results, a profit maximization goal should be pursued for only a short while. 
E)  According to economic theory and to business practices, there is nothing wrong with a profit maximization goal. 
A)  A profit maximization goal should never be attempted when a company is trying to market in a new geographic area. 
B)  A profit maximization goal should maximize profit on every single item. 
C)  Public opinion seldom has any effect on profit-maximization goals. 
D)  To provide efficient results, a profit maximization goal should be pursued for only a short while. 
E)  According to economic theory and to business practices, there is nothing wrong with a profit maximization goal.

Question 6

According to the text, oligopolies typically are found in the pet products, automobile tires, and detergent industries.

Accepted Answer

A) True 
 B)False

Question 7

_____ is the ratio of perceived benefits to price and any other incurred costs.

Accepted Answer

A)  A target return 
B)  Utility 
C)  Supply 
D)  Demand 
E)  Value 
A)  A target return 
B)  Utility 
C)  Supply 
D)  Demand 
E)  Value

Question 8

The almond butter toffee produced by Ultimate Confections in Wisconsin sells for $7.50 a box. Its price covers only its variable costs and does not cover such fixed costs as insurance and salary. A confections cookbook prepared by Ultimate Confections and sold to schools and churches that sell it as a fundraiser is another source of revenue for the company that covers fixed costs. Ultimate Confections uses _____ to set its price for its toffee.

Accepted Answer

A)  expected pricing 
B)  cost-plus pricing 
C)  marginal cost pricing 
D)  price elasticity 
E)  price inelasticity 
A)  expected pricing 
B)  cost-plus pricing 
C)  marginal cost pricing 
D)  price elasticity 
E)  price inelasticity

Question 9

Markup covers only anticipated operating expenses.

Accepted Answer

A) True 
 B)False

Question 10

Charles Moses manages a business that sells computer software to physicians. Which of the following managerial goals is most compatible if he decides the firm's pricing objective is to achieve a target return?

Accepted Answer

A)  to sell only the most current software 
B)  to reach 20 percent of all physicians with its advertising 
C)  to earn a net profit of 8 percent on net sales before taxes next year 
D)  to offer rebates wherever appropriate 
E)  to provide excellent customer service 
A)  to sell only the most current software 
B)  to reach 20 percent of all physicians with its advertising 
C)  to earn a net profit of 8 percent on net sales before taxes next year 
D)  to offer rebates wherever appropriate 
E)  to provide excellent customer service

Question 11

Zada sells decorative seasonal wreaths at a local flea market. The rent for a booth at the flea market is $100 per month. The variable cost for assembling each wreath is $6. The selling price for each wreath is $10. Last month Zada had someone sell for him. For every basket she sells, his assistant earns 10 percent of the sales price. Calculate the break-even point in units for last month.

Accepted Answer

A)  17 
B)  19 
C)  25 
D)  28 
E)  34 
A)  17 
B)  19 
C)  25 
D)  28 
E)  34

Question 12

When Patricia Flagg's friend asked her create something to sell at a holiday boutique food booth, she had no idea she was launching a new business. For her initial product she packaged eleven different kinds of beans, some herbs, and some spices with directions to add a ham hock, water, and vegetables for Minnesota Heartland soup. She has since added Illinois Prairie Corn chowder, which has dry corn, rice, and seasonings, as well as a Louisiana Red Bean gumbo mix and a New England fish soup mix. Each mix makes enough to feed 10 people. Her annual fixed costs are $9,000, and the variable costs for one bag of soup mix are $1.50. An individual bag of soup mix sells for $6.50. In her first year of operation, she sold 3,800 mixes.
-Flagg has not found any customers who think she has priced her mixes too high. Customers feel the product is worth the $6.50 price tag. In others words, her price is the:

Accepted Answer

A)  point of price elasticity 
B)  cost-plus price 
C)  marginal price 
D)  point of price inelasticity 
E)  expected price 
A)  point of price elasticity 
B)  cost-plus price 
C)  marginal price 
D)  point of price inelasticity 
E)  expected price

Question 13

Brideep sells laminated posters for decorating bare college dorm walls. He pays $1,000 rent and a salary of $500 to himself. Variable cost per unit (including the poster paper and the laminate) is $9. At a selling price of $24.95 per poster, the break-even point in units is:

Accepted Answer

A)  32. 
B)  61. 
C)  63. 
D)  94. 
E)  95. 
A)  32. 
B)  61. 
C)  63. 
D)  94. 
E)  95.

Question 14

Germany's Heildeberg Cement, France's Lafarge, France's Schwenck Holcim, and Germany's Dyckerhoff dominate the cement industry in the European Union. These companies exist in a market structure called a(n):

Accepted Answer

A)  oligopoly. 
B)  perfect competition. 
C)  dual competition. 
D)  monopoly. 
E)  pure competition. 
A)  oligopoly. 
B)  perfect competition. 
C)  dual competition. 
D)  monopoly. 
E)  pure competition.

Question 15

Under market conditions of perfect competition,:

Accepted Answer

A)  the products being marketed are highly differentiated. 
B)  a new product entering the market would be priced significantly higher than the current market level. 
C)  the seller has complete control over the selling price. 
D)  both buyers and sellers are well informed. 
E)  a new product entering the market would be priced significantly lower than the current market level. 
A)  the products being marketed are highly differentiated. 
B)  a new product entering the market would be priced significantly higher than the current market level. 
C)  the seller has complete control over the selling price. 
D)  both buyers and sellers are well informed. 
E)  a new product entering the market would be priced significantly lower than the current market level.

Question 16

One serious limitation of the cost-plus method for price determination is that the method:

Accepted Answer

A)  is not a good pricing method for companies whose pricing goal is a target return on investment. 
B)  is difficult for an inexperienced marketer to use. 
C)  ignores fixed costs in the short-run. 
D)  normally does not allow for the fact that there are different types of costs and these costs are affecteddifferently by changes in level of output. 
E)  assumes demand is a flexible, dynamic activity. 
A)  is not a good pricing method for companies whose pricing goal is a target return on investment. 
B)  is difficult for an inexperienced marketer to use. 
C)  ignores fixed costs in the short-run. 
D)  normally does not allow for the fact that there are different types of costs and these costs are affecteddifferently by changes in level of output. 
E)  assumes demand is a flexible, dynamic activity.

Question 17

Yoshi believes there is no need to waste money. He likes to feel he is getting the lowest price on everything he buys. In distinct consumer segment based on price perceptions does Yoshi belong?

Accepted Answer

A)  system beater 
B)  brand loyal 
C)  uninvolved 
D)  laggard 
E)  deal shopper 
A)  system beater 
B)  brand loyal 
C)  uninvolved 
D)  laggard 
E)  deal shopper

Question 18

Price:

Accepted Answer

A)  is an allocator of resources. 
B)  is a basic regulator of the economic system. 
C)  determines what will be produced. 
D)  needs to be established in a socially responsible manner. 
E)  is accurately described by all of the above. 
A)  is an allocator of resources. 
B)  is a basic regulator of the economic system. 
C)  determines what will be produced. 
D)  needs to be established in a socially responsible manner. 
E)  is accurately described by all of the above.

Question 19

Which of the following describes a limitation often associated with cost-plus pricing?

Accepted Answer

A)  The method relies too heavily on competitive pricing activities. 
B)  Costs are disregarded in pricing. 
C)  The method ignores market demand. 
D)  Only variable fixed costs are considered in price determination. 
E)  None of the above describes a limitation associated with cost-plus pricing. 
A)  The method relies too heavily on competitive pricing activities. 
B)  Costs are disregarded in pricing. 
C)  The method ignores market demand. 
D)  Only variable fixed costs are considered in price determination. 
E)  None of the above describes a limitation associated with cost-plus pricing.

Question 20

Aluminum, copper, and coal are typically sold under conditions that represent or, at least, come close to perfect competition.

Accepted Answer

A) True 
 B)False

Break-even analysis:

_____ is the cost of producing and selling one more unit.

Which of the following statements about a profit-maximization pricing goal is True?

According to the text, oligopolies typically are found in the pet products, automobile tires, and detergent industries.

_____ is the ratio of perceived benefits to price and any other incurred costs.

Markup covers only anticipated operating expenses.

Charles Moses manages a business that sells computer software to physicians. Which of the following managerial goals is most compatible if he decides the firm's pricing objective is to achieve a target return?

Brideep sells laminated posters for decorating bare college dorm walls. He pays $1,000 rent and a salary of $500 to himself. Variable cost per unit (including the poster paper and the laminate) is $9. At a selling price of $24.95 per poster, the break-even point in units is:

Germany's Heildeberg Cement, France's Lafarge, France's Schwenck Holcim, and Germany's Dyckerhoff dominate the cement industry in the European Union. These companies exist in a market structure called a(n):

Under market conditions of perfect competition,:

One serious limitation of the cost-plus method for price determination is that the method:

Yoshi believes there is no need to waste money. He likes to feel he is getting the lowest price on everything he buys. In distinct consumer segment based on price perceptions does Yoshi belong?

Price:

Which of the following describes a limitation often associated with cost-plus pricing?

Aluminum, copper, and coal are typically sold under conditions that represent or, at least, come close to perfect competition.

The Field of Marketing

The Dynamic Marketing Environment

Global Markets and Marketing

Consumer Markets and Buying Behavior

Business Markets and Buying Behavior

Marketing Research and Market Information

Product Planning and Development

Product-Mix Strategies

Brands, Packaging, and Other Product Features

Services Marketing

Pricing Strategies

Channels of Distribution

Retailing

Wholesaling and Physical Distribution

Integrated Marketing Communications

Personal Selling and Sales Management

Advertising, Sales Promotion, and Public Relations

Strategic Marketing Planning

Marketing Implementation and Evaluation

Marketing and the Information Economy

Market Segmentation Targeting and Positioning

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Exam 12: Price Determination

Break-even analysis:

_____ is the cost of producing and selling one more unit.

Which of the following statements about a profit-maximization pricing goal is True?

According to the text, oligopolies typically are found in the pet products, automobile tires, and detergent industries.

_____ is the ratio of perceived benefits to price and any other incurred costs.

Markup covers only anticipated operating expenses.

Charles Moses manages a business that sells computer software to physicians. Which of the following managerial goals is most compatible if he decides the firm's pricing objective is to achieve a target return?

Brideep sells laminated posters for decorating bare college dorm walls. He pays $1,000 rent and a salary of $500 to himself. Variable cost per unit (including the poster paper and the laminate) is $9. At a selling price of $24.95 per poster, the break-even point in units is:

Germany's Heildeberg Cement, France's Lafarge, France's Schwenck Holcim, and Germany's Dyckerhoff dominate the cement industry in the European Union. These companies exist in a market structure called a(n):

Under market conditions of perfect competition,:

One serious limitation of the cost-plus method for price determination is that the method:

Yoshi believes there is no need to waste money. He likes to feel he is getting the lowest price on everything he buys. In distinct consumer segment based on price perceptions does Yoshi belong?

Price:

Which of the following describes a limitation often associated with cost-plus pricing?

Aluminum, copper, and coal are typically sold under conditions that represent or, at least, come close to perfect competition.

The Field of Marketing

The Dynamic Marketing Environment

Global Markets and Marketing

Consumer Markets and Buying Behavior

Business Markets and Buying Behavior

Marketing Research and Market Information

Product Planning and Development

Product-Mix Strategies

Brands, Packaging, and Other Product Features

Services Marketing

Pricing Strategies

Channels of Distribution

Retailing

Wholesaling and Physical Distribution

Integrated Marketing Communications

Personal Selling and Sales Management

Advertising, Sales Promotion, and Public Relations

Strategic Marketing Planning

Marketing Implementation and Evaluation

Marketing and the Information Economy

Market Segmentation Targeting and Positioning

Filters