Question 1

Basic to setting a product's price is the extent of __________.This information is used in estimating the revenues the firm expects to receive.

Accepted Answer

A)  management's commitment to the product relative to other products in the line 
B)  curiosity or interest potential consumers expressed during market testing 
C)  customer demand for it 
D)  the firm's promotional budget 
E)  distribution requirements 
A)  management's commitment to the product relative to other products in the line 
B)  curiosity or interest potential consumers expressed during market testing 
C)  customer demand for it 
D)  the firm's promotional budget 
E)  distribution requirements

Question 2

Marginal revenue refers to

Accepted Answer

A)  the additional money required to produce one additional unit. 
B)  the least number of units sold to cover product, distribution, and promotional costs. 
C)  the amount by which marginal costs exceed variable costs. 
D)  the change in total revenue that results from producing and marketing one additional unit of the product. 
E)  the net gain in revenue if unit prices are lowered. 
A)  the additional money required to produce one additional unit. 
B)  the least number of units sold to cover product, distribution, and promotional costs. 
C)  the amount by which marginal costs exceed variable costs. 
D)  the change in total revenue that results from producing and marketing one additional unit of the product. 
E)  the net gain in revenue if unit prices are lowered.

Question 3

total expense incurred by a firm in producing and marketing a product,which equals the sum of fixed cost and variable cost,is referred to as

Accepted Answer

A)  overhead cost. 
B)  total cost. 
C)  unit cost. 
D)  average cost. 
E)  marginal cost. 
A)  overhead cost. 
B)  total cost. 
C)  unit cost. 
D)  average cost. 
E)  marginal cost.

Question 4

Figure 13-2
-Figure 13-2 above represents the six steps in setting price."D" represents the step at which a firm would

Accepted Answer

A)  estimate demand and revenue. 
B)  scan competitors for prices of similar products or services. 
C)  select an approximate price level. 
D)  determine cost, volume, and profit relationships. 
E)  establish the price range. 
A)  estimate demand and revenue. 
B)  scan competitors for prices of similar products or services. 
C)  select an approximate price level. 
D)  determine cost, volume, and profit relationships. 
E)  establish the price range.

Question 5

money or other considerations (including other products and services)exchanged for the ownership or use of a product or service is referred to as __________.

Accepted Answer

A)  fee 
B)  value 
C)  remuneration 
D)  price 
E)  exchange rate 
A)  fee 
B)  value 
C)  remuneration 
D)  price 
E)  exchange rate

Question 6

Figure 13-2
-Figure 13-2 above represents the six steps in setting price.Which letter represents the step where a firm would estimate price elasticity?

Accepted Answer

A)  "A" 
B)  "B" 
C)  "C" 
D)  "D" 
E)  "E" 
A)  "A" 
B)  "B" 
C)  "C" 
D)  "D" 
E)  "E"

Question 7

Which of the following statements regarding sales goals is most accurate?

Accepted Answer

A)  For marketing managers, sales revenue or unit sales are more easily addressed than profit goals. 
B)  Cutting prices for a single product in a product line to raise unit sales often results in an increase in sales for related products in the line as well. 
C)  Very often, cutting prices results in a decrease in market share. 
D)  Setting unit volume sales as a pricing objective results in price wars with competitors, so the practice is limited to industries with as few competitors as possible. 
E)  An advantage of increasing unit volume sales is that it always results in an increase in profits. 
A)  For marketing managers, sales revenue or unit sales are more easily addressed than profit goals. 
B)  Cutting prices for a single product in a product line to raise unit sales often results in an increase in sales for related products in the line as well. 
C)  Very often, cutting prices results in a decrease in market share. 
D)  Setting unit volume sales as a pricing objective results in price wars with competitors, so the practice is limited to industries with as few competitors as possible. 
E)  An advantage of increasing unit volume sales is that it always results in an increase in profits.

Question 8

Figure 13-10A
-Figure 13-10A above,"Y" represents

Accepted Answer

A)  fixed cost 
B)  marginal cost 
C)  variable cost 
D)  marginal revenue 
E)  MR = MC 
A)  fixed cost 
B)  marginal cost 
C)  variable cost 
D)  marginal revenue 
E)  MR = MC

Question 9

is enrolled for spring semester at college.The tuition is $6,000,but she has a scholarship for $1,000 as well as a work-study grant of $1,500.The health fees and student activity fees are $150 for the semester.What is the final price that Tara will pay for the spring semester?

Accepted Answer

A)  $2,500 
B)  $2,650 
C)  $3,150 
D)  $3,650 
E)  $6,150 
A)  $2,500 
B)  $2,650 
C)  $3,150 
D)  $3,650 
E)  $6,150

Question 10

McDonald's Menu Board Photo
-shown in the McDonald's menu board photo above,McDonald's is most likely using which type of pricing strategy?

Accepted Answer

A)  predatory pricing 
B)  value-pricing 
C)  loss-leader pricing 
D)  odd-even pricing 
E)  barter 
A)  predatory pricing 
B)  value-pricing 
C)  loss-leader pricing 
D)  odd-even pricing 
E)  barter

Question 11

graphic presentation of the break-even analysis that shows when total revenue and total cost intersect to identify profit or loss for a given quantity sold is referred to as a __________.

Accepted Answer

A)  Gantt chart 
B)  demand curve 
C)  ROI analysis 
D)  cross-tabulation 
E)  break-even chart 
A)  Gantt chart 
B)  demand curve 
C)  ROI analysis 
D)  cross-tabulation 
E)  break-even chart

Question 12

of the following are examples of pricing objectives EXCEPT:

Accepted Answer

A)  market share. 
B)  survival. 
C)  unit sales. 
D)  social responsibility. 
E)  competitors' prices. 
A)  market share. 
B)  survival. 
C)  unit sales. 
D)  social responsibility. 
E)  competitors' prices.

Question 13

According to the price equation,final price equals list price minus __________ plus extra fees.

Accepted Answer

A)  profits 
B)  commissions 
C)  trade-ins 
D)  taxes 
E)  incentives and allowances 
A)  profits 
B)  commissions 
C)  trade-ins 
D)  taxes 
E)  incentives and allowances

Question 14

newer a product and the earlier it is in its life cycle,

Accepted Answer

A)  the lower the price the firm must charge. 
B)  the more competition it has. 
C)  the higher the price that can usually be charged. 
D)  the lower its production costs are. 
E)  the lower its unit variable cost is. 
A)  the lower the price the firm must charge. 
B)  the more competition it has. 
C)  the higher the price that can usually be charged. 
D)  the lower its production costs are. 
E)  the lower its unit variable cost is.

Question 15

Washburn recently purchased Parker Guitar,another guitar manufacturer that designed products for professionals and collectors,and will combine the two production facilities into a new location.Washburn expects the acquisition to reduce its rent and tax expenses by 40 percent,and the new skilled employees will reduce the hours of work needed for each unit by 15 percent.This would cause the slope of the total cost curve to _________ and the break-even quantity to _________.

Accepted Answer

A)  decrease; stay the same 
B)  decrease; increase 
C)  increase; increase 
D)  stay the same; increase 
E)  decrease; decrease 
A)  decrease; stay the same 
B)  decrease; increase 
C)  increase; increase 
D)  stay the same; increase 
E)  decrease; decrease

Question 16

competition is the competitive situation where

Accepted Answer

A)  many sellers follow market price for identical, commodity products. 
B)  one seller sets the price for a unique product. 
C)  few sellers are sensitive to one another's prices. 
D)  many sellers compete on nonprice factors. 
E)  one or few sellers compete solely on nonprice factors. 
A)  many sellers follow market price for identical, commodity products. 
B)  one seller sets the price for a unique product. 
C)  few sellers are sensitive to one another's prices. 
D)  many sellers compete on nonprice factors. 
E)  one or few sellers compete solely on nonprice factors.

Question 17

Angeles Lakers tickets cost so much because

Accepted Answer

A)  the Lakers subsidize the Los Angeles Clippers, which also play in Staples Center. 
B)  the Lakers must cover all of their operating costs while earning a profit. 
C)  their stadium is the most expensive to maintain. 
D)  their luxury payroll tax and marketing costs are the highest in the NBA. 
E)  the team must cover ticket broker fees paid as a result of unsold seats at home games. 
A)  the Lakers subsidize the Los Angeles Clippers, which also play in Staples Center. 
B)  the Lakers must cover all of their operating costs while earning a profit. 
C)  their stadium is the most expensive to maintain. 
D)  their luxury payroll tax and marketing costs are the highest in the NBA. 
E)  the team must cover ticket broker fees paid as a result of unsold seats at home games.

Question 18

Selecting an approximate price level would occur during __________ of the price-setting process.

Accepted Answer

A)  Step 1 
B)  Step 2 
C)  Step 3 
D)  Step 4 
E)  Step 5 
A)  Step 1 
B)  Step 2 
C)  Step 3 
D)  Step 4 
E)  Step 5

Question 19

Figure 13-12
-Figure 13-12 above shows that by selling 200 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 20

Total cost refers to

Accepted Answer

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

Exam 13: Building the Price Foundation

Basic to setting a product's price is the extent of __________.This information is used in estimating the revenues the firm expects to receive.

Marginal revenue refers to

total expense incurred by a firm in producing and marketing a product,which equals the sum of fixed cost and variable cost,is referred to as

Figure 13-2 -Figure 13-2 above represents the six steps in setting price."D" represents the step at which a firm would

money or other considerations (including other products and services)exchanged for the ownership or use of a product or service is referred to as __________.

Figure 13-2 -Figure 13-2 above represents the six steps in setting price.Which letter represents the step where a firm would estimate price elasticity?

Which of the following statements regarding sales goals is most accurate?

Figure 13-10A -Figure 13-10A above,"Y" represents

is enrolled for spring semester at college.The tuition is $6,000,but she has a scholarship for $1,000 as well as a work-study grant of $1,500.The health fees and student activity fees are $150 for the semester.What is the final price that Tara will pay for the spring semester?

McDonald's Menu Board Photo -shown in the McDonald's menu board photo above,McDonald's is most likely using which type of pricing strategy?

graphic presentation of the break-even analysis that shows when total revenue and total cost intersect to identify profit or loss for a given quantity sold is referred to as a __________.

of the following are examples of pricing objectives EXCEPT:

According to the price equation,final price equals list price minus __________ plus extra fees.

newer a product and the earlier it is in its life cycle,

competition is the competitive situation where

Angeles Lakers tickets cost so much because

Selecting an approximate price level would occur during __________ of the price-setting process.

Figure 13-12 -Figure 13-12 above shows that by selling 200 pictures,the firm will

Total cost refers to

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

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