Question 1

average amount of money received for selling one unit of a product,or simply the price of that unit,is referred to as __________.

Accepted Answer

A)  profit 
B)  total revenue 
C)  unit variable revenue 
D)  average revenue 
E)  marginal revenue 
A)  profit 
B)  total revenue 
C)  unit variable revenue 
D)  average revenue 
E)  marginal revenue

Question 2

Which of the following statements about unitary demand is most accurate?

Accepted Answer

A)  Products for which there are a lot of substitutes traditionally have unitary demand. 
B)  Products such as life-saving drugs tend to have unitary demand. 
C)  Products with unitary demand will have price elasticity equal to 1. 
D)  Products with unitary demand have a price elasticity that is greater than one. 
E)  High-end consumer products like jets, yachts, and summer homes usually have unitary demand. 
A)  Products for which there are a lot of substitutes traditionally have unitary demand. 
B)  Products such as life-saving drugs tend to have unitary demand. 
C)  Products with unitary demand will have price elasticity equal to 1. 
D)  Products with unitary demand have a price elasticity that is greater than one. 
E)  High-end consumer products like jets, yachts, and summer homes usually have unitary demand.

Question 3

Which of the following statements would most likely be spoken during Step 2 of the price-setting process?

Accepted Answer

A)  "It's important to offer discounts to seniors." 
B)  "We have to try to achieve an 8 percent profit share." 
C)  "The starting price should be $4.99 and we can raise the price again in six months." 
D)  "But, if we increase the price even by one dollar, how many customers will we lose?" 
E)  "We should probably price the extra large version somewhere between $600 and $650." 
A)  "It's important to offer discounts to seniors." 
B)  "We have to try to achieve an 8 percent profit share." 
C)  "The starting price should be $4.99 and we can raise the price again in six months." 
D)  "But, if we increase the price even by one dollar, how many customers will we lose?" 
E)  "We should probably price the extra large version somewhere between $600 and $650."

Question 4

Washburn Guitars markets its guitars to four distinct market segments.The firm's mass customization instruments are targeted at

Accepted Answer

A)  first-time buyers. 
B)  professional musicians. 
C)  stars and famous musicians. 
D)  large institutional buyers such as band programs. 
E)  intermediate-skill players who may become professional musicians. 
A)  first-time buyers. 
B)  professional musicians. 
C)  stars and famous musicians. 
D)  large institutional buyers such as band programs. 
E)  intermediate-skill players who may become professional musicians.

Question 5

average price Washburn Guitars charges for a guitar is $349.99.This pricing level is most reflective of a(n)__________ approach.

Accepted Answer

A)  skimming price 
B)  penetration price 
C)  prestige price 
D)  odd-even pricing 
E)  target price 
A)  skimming price 
B)  penetration price 
C)  prestige price 
D)  odd-even pricing 
E)  target price

Question 6

Figure 13-7
-According to Figure 13-7 above,if Newsweek raises its price from $2.00 per issue to $2.50 per issue,what happens to total revenue?

Accepted Answer

A)  total revenue goes up 
B)  total revenue goes down 
C)  total revenue stays the same 
D)  total revenue is not related to the price 
E)  it is impossible to tell from the information given in the figure 
A)  total revenue goes up 
B)  total revenue goes down 
C)  total revenue stays the same 
D)  total revenue is not related to the price 
E)  it is impossible to tell from the information given in the figure

Question 7

Figure 13-4
-Figure 13-4 above,column "C" represents which type of competitive market?

Accepted Answer

A)  pure monopoly 
B)  oligopoly 
C)  monopolistic competition 
D)  pure competition 
E)  monopolistic oligopoly 
A)  pure monopoly 
B)  oligopoly 
C)  monopolistic competition 
D)  pure competition 
E)  monopolistic oligopoly

Question 8

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

Accepted Answer

A)  taxes 
B)  raw materials 
C)  sales commissions 
D)  building rental expense 
E)  hourly wages 
A)  taxes 
B)  raw materials 
C)  sales commissions 
D)  building rental expense 
E)  hourly wages

Question 9

American Eagle Outfitters In-Store Signage Photo
-American Eagle Outfitters in-store signage photo above shows that customers can buy an American Eagle Outfitters hoodie for $24.95 and then purchase another one for 50 percent off (BOGO Deal "A").Another BOGO deal (not shown above)offers consumers a markdown of 10 percent if they buy two hoodies (BOGO Deal "B").In a third BOGO deal (not shown above),a retailer has marked down the price of hoodies from $24.95 to $22.95 per hoodie,so you'll consider buying two at that price (BOGO Deal "C").BOGO deal #4 (not shown above)offers consumers the following terms: 5 percent off the first item and then 10 percent off the reduced price for the second item (BOGO Deal "D").Finally,a fifth BOGO deal offers consumers the following terms: $10 off of all purchases of $40 or more (BOGO Deal "E").Which BOGO deal offers the best value (least cost)to consumers for the purchase of American Eagle Outfitters hoodies?

Accepted Answer

A)  BOGO Deal "A" 
B)  BOGO Deal "B" 
C)  BOGO Deal "C" 
D)  BOGO Deal "D" 
E)  BOGO Deal "E" 
A)  BOGO Deal "A" 
B)  BOGO Deal "B" 
C)  BOGO Deal "C" 
D)  BOGO Deal "D" 
E)  BOGO Deal "E"

Question 10

firm's profit equation equals

Accepted Answer

A)  Total cost + Total revenue or [(Unit price × Quantity sold) − (Fixed cost + Variable cost)]. 
B)  Total revenue − Total cost or [(Unit price × Quantity sold) − (Fixed cost + Variable cost)]. 
C)  Total cost − Marginal cost or [(Fixed cost + Variable cost) ÷ (Unit price × Quantity sold)]. 
D)  Total cost − Variable cost or [(Fixed cost + Variable cost) + (Unit price × Quantity sold)]. 
E)  Total revenue + Total cost or [(Unit price × Quantity sold) − (Fixed cost + Variable cost)]. 
A)  Total cost + Total revenue or [(Unit price × Quantity sold) − (Fixed cost + Variable cost)]. 
B)  Total revenue − Total cost or [(Unit price × Quantity sold) − (Fixed cost + Variable cost)]. 
C)  Total cost − Marginal cost or [(Fixed cost + Variable cost) ÷ (Unit price × Quantity sold)]. 
D)  Total cost − Variable cost or [(Fixed cost + Variable cost) + (Unit price × Quantity sold)]. 
E)  Total revenue + Total cost or [(Unit price × Quantity sold) − (Fixed cost + Variable cost)].

Question 11

Fixed cost refers to

Accepted Answer

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

Question 12

shift of the demand curve from D1 to D2 in Figure 13-5B above indicates

Accepted Answer

A)  fewer units are demanded at a given price. 
B)  more units are demanded at a given price. 
C)  the price has decreased. 
D)  the price has increased. 
E)  there is not enough information given to indicate what happened. 
A)  fewer units are demanded at a given price. 
B)  more units are demanded at a given price. 
C)  the price has decreased. 
D)  the price has increased. 
E)  there is not enough information given to indicate what happened.

Question 13

1 of the price-setting process identifies pricing objectives and constraints.Describe the reasons these objectives may change and give examples of objectives a firm may set.

Accepted Answer

Pricing objectives involve specifying th

Question 14

quantity at which total revenue and total cost are equal is referred to as

Accepted Answer

A)  break-even point. 
B)  tipping point. 
C)  profitability point. 
D)  incremental return on investment. 
E)  sustainability. 
A)  break-even point. 
B)  tipping point. 
C)  profitability point. 
D)  incremental return on investment. 
E)  sustainability.

Question 15

primary reason for Washburn's success is

Accepted Answer

A)  underselling competitors by mass-producing fine-quality guitars. 
B)  developing product lines at different price points for different market segments. 
C)  offering significant price breaks to well-known performers in exchange for product endorsements. 
D)  selling traditional American "rock 'n roll" guitars in global markets. 
E)  setting up free music programs and donating low-price-point guitars to students in schools that have lost their music programs due to budget constraints. 
A)  underselling competitors by mass-producing fine-quality guitars. 
B)  developing product lines at different price points for different market segments. 
C)  offering significant price breaks to well-known performers in exchange for product endorsements. 
D)  selling traditional American "rock 'n roll" guitars in global markets. 
E)  setting up free music programs and donating low-price-point guitars to students in schools that have lost their music programs due to budget constraints.

Question 16

Which of the following statements about price elasticity of demand is most accurate?

Accepted Answer

A)  Price elasticity with inelastic demand is less than 1. 
B)  The more substitutes a product has, the less likely it is to be price elastic. 
C)  Unitary demand represents the relationship between the cash outlay necessary to purchase a product relative to a person's disposable income. 
D)  With inelastic demand, reducing price will result in an increase of total revenue. 
E)  With inelastic demand, reducing price will result in an increase in total revenue, although not necessarily an increase in profit. 
A)  Price elasticity with inelastic demand is less than 1. 
B)  The more substitutes a product has, the less likely it is to be price elastic. 
C)  Unitary demand represents the relationship between the cash outlay necessary to purchase a product relative to a person's disposable income. 
D)  With inelastic demand, reducing price will result in an increase of total revenue. 
E)  With inelastic demand, reducing price will result in an increase in total revenue, although not necessarily an increase in profit.

Question 17

Figure 13-12
-Figure 13-12 above shows that by selling 800 pictures,the firm will

Accepted Answer

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

Question 18

factors determine price elasticity of demand?

Accepted Answer

Price elasticity of demand is determined

Question 19

Marketing executives must translate estimates of customer demand into estimates of

Accepted Answer

A)  personnel. 
B)  advertising expenditures. 
C)  ancillary product support. 
D)  revenues the firm expects to receive. 
E)  supply. 
A)  personnel. 
B)  advertising expenditures. 
C)  ancillary product support. 
D)  revenues the firm expects to receive. 
E)  supply.

Question 20

Price elasticity of demand is determined by a number of factors such as whether the item is a luxury product or service,the availability of substitutes,the necessity of the product or service,and

Accepted Answer

A)  the stage of the product or service in its product life cycle. 
B)  the degree of carrying costs for the manufacturer or distributor. 
C)  the financial resources of the organization itself. 
D)  the cash outlay of purchase relative to a person's disposable income. 
E)  the ability of the organization to meet sudden increases in demand. 
A)  the stage of the product or service in its product life cycle. 
B)  the degree of carrying costs for the manufacturer or distributor. 
C)  the financial resources of the organization itself. 
D)  the cash outlay of purchase relative to a person's disposable income. 
E)  the ability of the organization to meet sudden increases in demand.

Exam 13: Building the Price Foundation

average amount of money received for selling one unit of a product,or simply the price of that unit,is referred to as __________.

Which of the following statements about unitary demand is most accurate?

Which of the following statements would most likely be spoken during Step 2 of the price-setting process?

Washburn Guitars markets its guitars to four distinct market segments.The firm's mass customization instruments are targeted at

average price Washburn Guitars charges for a guitar is $349.99.This pricing level is most reflective of a(n)__________ approach.

Figure 13-7 -According to Figure 13-7 above,if Newsweek raises its price from $2.00 per issue to $2.50 per issue,what happens to total revenue?

Figure 13-4 -Figure 13-4 above,column "C" represents which type of competitive market?

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

firm's profit equation equals

Fixed cost refers to

shift of the demand curve from D1 to D2 in Figure 13-5B above indicates

1 of the price-setting process identifies pricing objectives and constraints.Describe the reasons these objectives may change and give examples of objectives a firm may set.

quantity at which total revenue and total cost are equal is referred to as

primary reason for Washburn's success is

Which of the following statements about price elasticity of demand is most accurate?

Figure 13-12 -Figure 13-12 above shows that by selling 800 pictures,the firm will

factors determine price elasticity of demand?

Marketing executives must translate estimates of customer demand into estimates of

Price elasticity of demand is determined by a number of factors such as whether the item is a luxury product or service,the availability of substitutes,the necessity of the product or service,and

Creating Customer Relationships and Value Through Marketing

Developing Successful Organizational and Marketing Strategies

Scanning the Marketing Environment

Ethical and Social Responsibility for Sustainable Marketing

Understanding Consumer Behavior

Understanding Organizations As Customers

Understanding and Reaching Global Consumers and Markets

Marketing Research: From Customer Insights to Actions

Market Segmentation,Targeting,and Positioning

Developing New Products and Services

Managing Successful Products,Services,and Brands

Services Marketing

Arriving at the Final Price

Managing Marketing Channels and Supply Chains

Retailing and Wholesaling

Integrated Marketing Communications and Direct Marketing

Advertising, Sales Promotion, and Public Relations

Using Social Media and Mobile Marketing to Connect With Consumers

Personal Selling and Sales Management

Implementing Interactive and Multi-Channel Marketing

Pulling It All Together: The Strategic Marketing Process

Filters

shift of the demand curve from D₁ to D₂in Figure 13-5B above indicates