Question 1

The assumption that demand is elastic at a number of price points,but is inelastic between these price points leads to which approach to pricing?

Accepted Answer

A) target pricing 
B) skimming pricing 
C) penetration pricing 
D) price lining 
A) target pricing 
B) skimming pricing 
C) penetration pricing 
D) price lining

Question 2

Which term describes factors that affect price and include: newness of the product,whether it is part of a product line,and cost of changing a price?

Accepted Answer

A) price fixings 
B) pricing constraints 
C) price elasticities 
D) pricing demands 
A) price fixings 
B) pricing constraints 
C) price elasticities 
D) pricing demands

Question 3

Figure: 13-7  
-Figure 13-7 is drawn to show that variable costs are smaller than fixed costs when the firm sells

Accepted Answer

A) 400 pictures. 
B) 900 pictures. 
C) 1000 pictures. 
D) 1200 pictures. 
A) 400 pictures. 
B) 900 pictures. 
C) 1000 pictures. 
D) 1200 pictures.

Question 4

Factors that determine consumers' willingness and ability to pay for goods and services are called:

Accepted Answer

A) economic environmental factors. 
B) the "misery index." 
C) demand factors. 
D) elasticity factors. 
A) economic environmental factors. 
B) the "misery index." 
C) demand factors. 
D) elasticity factors.

Question 5

For $19.99 a month you can purchase only a paper subscription to the Globe and Mail newspaper.For $9.99 you can purchase only an online subscription.However,for $22.99 you get both.This is an example of:

Accepted Answer

A) Packaged pricing 
B) Multi-product pricing 
C) Bundle pricing 
D) Tie-in pricing 
A) Packaged pricing 
B) Multi-product pricing 
C) Bundle pricing 
D) Tie-in pricing

Question 6

Fixed cost refers to:

Accepted Answer

A) the sum of the expenses that vary directly with the quantity of the product produced and sold. 
B) the total expense incurred by a firm in producing and marketing a product or service. 
C) expenses that are stable and do not change with the quantity of the product that is produced and sold. 
D) the consideration exchanged for the ownership or use of a good or service. 
A) the sum of the expenses that vary directly with the quantity of the product produced and sold. 
B) the total expense incurred by a firm in producing and marketing a product or service. 
C) expenses that are stable and do not change with the quantity of the product that is produced and sold. 
D) the consideration exchanged for the ownership or use of a good or service.

Question 7

A home improvement retailer advertises that it has a popular central vacuum system available for $420.00.The ad suggests that the competition's price is $500.00.It was verified that the competitors did not offer the central vacuum system at $500.00.What deceptive pricing practice is the home improvement retailer attempting?

Accepted Answer

A) bait and switch 
B) comparable value comparison 
C) bargains conditional on other purchases 
D) comparison with suggested prices 
A) bait and switch 
B) comparable value comparison 
C) bargains conditional on other purchases 
D) comparison with suggested prices

Question 8

Which of the following statements about penetration pricing is true?

Accepted Answer

A) Penetration pricing is a profit-oriented approach to pricing. 
B) Penetration pricing is a cost-based pricing method. 
C) Penetration pricing encourages competitors to enter a market. 
D) A penetration pricing strategy is more effective in a marketplace with price-sensitive consumers. 
A) Penetration pricing is a profit-oriented approach to pricing. 
B) Penetration pricing is a cost-based pricing method. 
C) Penetration pricing encourages competitors to enter a market. 
D) A penetration pricing strategy is more effective in a marketplace with price-sensitive consumers.

Question 9

Customary pricing is:

Accepted Answer

A) a pricing method where the price the seller quotes includes all transportation costs. 
B) setting the same price for similar customers who buy the same product and quantities under the same conditions. 
C) deliberately selling a product below its list price to attract attention to it. 
D) a method of pricing a product based on tradition, standardized channels of distribution, or other competitive factors. 
A) a pricing method where the price the seller quotes includes all transportation costs. 
B) setting the same price for similar customers who buy the same product and quantities under the same conditions. 
C) deliberately selling a product below its list price to attract attention to it. 
D) a method of pricing a product based on tradition, standardized channels of distribution, or other competitive factors.

Question 10

For every ten pallets of watermelon a local grocery store purchases,the farm will include one pallet of cucumbers for free.This is an example of offering a(n):

Accepted Answer

A) quantity discount. 
B) flexible pricing policy. 
C) promotional allowance. 
D) payoff. 
A) quantity discount. 
B) flexible pricing policy. 
C) promotional allowance. 
D) payoff.

Question 11

Figure: 13-7  
-Figure 13-7 shows that by selling 800 pictures the firm will

Accepted Answer

A) break even. 
B) incur a loss. 
C) earn a profit. 
D) have no fixed costs. 
A) break even. 
B) incur a loss. 
C) earn a profit. 
D) have no fixed costs.

Question 12

Ships Ahoy is a small company that makes model sailboat kits priced at $120 each.(There is no quantity discount.)The cost of the materials that go into each kit is $45.It costs $5 in labour to assemble a kit.The company has monthly expenses of $1,000 for rent and insurance,$200 for heat and electricity,$500 for advertising,and $3,500 for the monthly salary of its owner.Last month the company sold 150 kits.Ships Ahoy's total revenue for the month was:

Accepted Answer

A) $6,750. 
B) $7,500. 
C) $10,500. 
D) $18,000. 
A) $6,750. 
B) $7,500. 
C) $10,500. 
D) $18,000.

Question 13

What is the main factor that has led to the fact that consumers may not necessarily view lower priced products as lower priced?

Accepted Answer

A) intense competition has led to lower costs 
B) lower costs has led to intense competition 
C) less competition has led to higher prices. 
D) less competition has led to lower prices. 
A) intense competition has led to lower costs 
B) lower costs has led to intense competition 
C) less competition has led to higher prices. 
D) less competition has led to lower prices.

Question 14

The practice of replacing promotional allowances with lower manufacturer list prices is called:

Accepted Answer

A) everyday low pricing. 
B) FOB origin pricing. 
C) trade-in allowances. 
D) single-zone pricing. 
A) everyday low pricing. 
B) FOB origin pricing. 
C) trade-in allowances. 
D) single-zone pricing.

Question 15

Which of the following is a typical example of a fixed cost?

Accepted Answer

A) taxes 
B) building rental expenses 
C) raw materials 
D) sales commissions 
A) taxes 
B) building rental expenses 
C) raw materials 
D) sales commissions

Question 16

Which of the following statements about price lining is true?

Accepted Answer

A) This method assumes that demand is elastic at each price point used. 
B) Primarily government contractors use this method. 
C) Those who use this method prefer to have at least a dozen different price points. 
D) This method assumes demand is elastic between the price points. 
A) This method assumes that demand is elastic at each price point used. 
B) Primarily government contractors use this method. 
C) Those who use this method prefer to have at least a dozen different price points. 
D) This method assumes demand is elastic between the price points.

Question 17

Describe the types of competitive markets,and give an example of each.

Accepted Answer

The answer of Describe the types of competitive markets,and give...

Question 18

Pharmaceutical companies that manufacture drugs for AIDS patients have been asked to provide free drugs to Africa where the disease is of epidemic proportions.So far,most of the companies have continued to charge for the medication.People who believe the pharmaceutical companies should provide free AIDS medication and recognize their obligation to act altruistically want the companies to have a _____ pricing objective.

Accepted Answer

A) target return 
B) marginal profit 
C) unit volume 
D) social responsibility 
A) target return 
B) marginal profit 
C) unit volume 
D) social responsibility

Question 19

Market analysts for a large cereal company estimated that price elasticity of demand for pre-sweetened cereal is 1.97,but that the entire market for ready-to-eat cereals exhibits price elasticity of demand of 0.36.Most likely,this information will be collected by managers in which step of the price-setting process?

Accepted Answer

A) identifying pricing constraints and objectives 
B) estimating the break-even point 
C) estimating demand and revenue 
D) selecting an appropriate (approximate) price level 
A) identifying pricing constraints and objectives 
B) estimating the break-even point 
C) estimating demand and revenue 
D) selecting an appropriate (approximate) price level

Question 20

If competitive market circumstances are such that there is some leader-follower price competition,some product differentiation,and the purpose of advertising is to inform,but avoid price competition,then _____ must exist in the industry.

Accepted Answer

A) a pure monopoly 
B) an oligopoly 
C) monopolistic competition 
D) pure competition 
A) a pure monopoly 
B) an oligopoly 
C) monopolistic competition 
D) pure competition

The assumption that demand is elastic at a number of price points,but is inelastic between these price points leads to which approach to pricing?

Which term describes factors that affect price and include: newness of the product,whether it is part of a product line,and cost of changing a price?

Figure: 13-7 -Figure 13-7 is drawn to show that variable costs are smaller than fixed costs when the firm sells

Factors that determine consumers' willingness and ability to pay for goods and services are called:

For $19.99 a month you can purchase only a paper subscription to the Globe and Mail newspaper.For $9.99 you can purchase only an online subscription.However,for $22.99 you get both.This is an example of:

Fixed cost refers to:

Which of the following statements about penetration pricing is true?

Customary pricing is:

For every ten pallets of watermelon a local grocery store purchases,the farm will include one pallet of cucumbers for free.This is an example of offering a(n):

Figure: 13-7 -Figure 13-7 shows that by selling 800 pictures the firm will

What is the main factor that has led to the fact that consumers may not necessarily view lower priced products as lower priced?

The practice of replacing promotional allowances with lower manufacturer list prices is called:

Which of the following is a typical example of a fixed cost?

Which of the following statements about price lining is true?

Describe the types of competitive markets,and give an example of each.

If competitive market circumstances are such that there is some leader-follower price competition,some product differentiation,and the purpose of advertising is to inform,but avoid price competition,then _____ must exist in the industry.

Marketing: Customer Value, satisfaction, relationships, and Experiences

Developing Successful Marketing Strategies

Scanning the Marketing Environment

Ethics and Social Responsibility in Marketing

Consumer Behaviour

Organizational Markets and Buyer Behaviour

Reaching Global Markets

Marketing Research: From Information to Action

Market Segmentation, Targeting, and Positioning

Developing New Products and Services

Managing Products and Brands

Managing Services

Managing Marketing Channels and Supply Chains

Retailing

Integrated Marketing Communications and Direct Marketing

Advertising, Sales Promotion, and Public Relations

Personal Selling and Sales Management

Pulling It All Together: The Strategic Marketing Process

Using Social Media to Connect With Consumers

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Exam 13: Pricing Products and Services

The assumption that demand is elastic at a number of price points,but is inelastic between these price points leads to which approach to pricing?

Which term describes factors that affect price and include: newness of the product,whether it is part of a product line,and cost of changing a price?

Figure: 13-7 -Figure 13-7 is drawn to show that variable costs are smaller than fixed costs when the firm sells

Factors that determine consumers' willingness and ability to pay for goods and services are called:

For $19.99 a month you can purchase only a paper subscription to the Globe and Mail newspaper.For $9.99 you can purchase only an online subscription.However,for $22.99 you get both.This is an example of:

Fixed cost refers to:

Which of the following statements about penetration pricing is true?

Customary pricing is:

For every ten pallets of watermelon a local grocery store purchases,the farm will include one pallet of cucumbers for free.This is an example of offering a(n):

Figure: 13-7 -Figure 13-7 shows that by selling 800 pictures the firm will

What is the main factor that has led to the fact that consumers may not necessarily view lower priced products as lower priced?

The practice of replacing promotional allowances with lower manufacturer list prices is called:

Which of the following is a typical example of a fixed cost?

Which of the following statements about price lining is true?

Describe the types of competitive markets,and give an example of each.

If competitive market circumstances are such that there is some leader-follower price competition,some product differentiation,and the purpose of advertising is to inform,but avoid price competition,then _____ must exist in the industry.

Marketing: Customer Value, satisfaction, relationships, and Experiences

Developing Successful Marketing Strategies

Scanning the Marketing Environment

Ethics and Social Responsibility in Marketing

Consumer Behaviour

Organizational Markets and Buyer Behaviour

Reaching Global Markets

Marketing Research: From Information to Action

Market Segmentation, Targeting, and Positioning

Developing New Products and Services

Managing Products and Brands

Managing Services

Managing Marketing Channels and Supply Chains

Retailing

Integrated Marketing Communications and Direct Marketing

Advertising, Sales Promotion, and Public Relations

Personal Selling and Sales Management

Pulling It All Together: The Strategic Marketing Process

Using Social Media to Connect With Consumers

Filters