Question 1

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

Accepted Answer

A) product line pricing 
B) skimming pricing 
C) penetration pricing 
D) price lining 
E) odd-even pricing 
A) product line pricing 
B) skimming pricing 
C) penetration pricing 
D) price lining 
E) odd-even pricing

Question 2

Price-lining is considered to be a __________ approach to pricing.

Accepted Answer

A) cost-oriented 
B) demand-oriented 
C) profit-oriented 
D) competition-oriented 
E) service-oriented 
A) cost-oriented 
B) demand-oriented 
C) profit-oriented 
D) competition-oriented 
E) service-oriented

Question 3

Consider Figure 14-8 above.Suppose a manufacturer quotes price in the following form: List price-$100 less 30/10/5.What does "A" represent?

Accepted Answer

A) the wholesaler's trade discount 
B) the retailer's trade discount 
C) the jobber's trade discount 
D) the manufacturer's trade discount 
E) the manufacturer's markup 
A) the wholesaler's trade discount 
B) the retailer's trade discount 
C) the jobber's trade discount 
D) the manufacturer's trade discount 
E) the manufacturer's markup

Question 4

Prestige pricing is considered to be a __________ approach to pricing.

Accepted Answer

A) demand-oriented 
B) cost-oriented 
C) profit-oriented 
D) competition-oriented 
E) service-oriented 
A) demand-oriented 
B) cost-oriented 
C) profit-oriented 
D) competition-oriented 
E) service-oriented

Question 5

To reward wholesalers and retailers for marketing functions they will perform in the future,a manufacturer often gives __________ discounts.

Accepted Answer

A) seasonal 
B) cash 
C) trade 
D) quantity 
E) cumulative 
A) seasonal 
B) cash 
C) trade 
D) quantity 
E) cumulative

Question 6

Predatory pricing is

Accepted Answer

A) an arrangement a manufacturer makes with a reseller to handle only its products and not those of a competitor. 
B) the practice of charging different prices to different buyers for goods of like grade and quality. 
C) the practice of charging a very low price for a product with the intent of driving competitors out of business. 
D) a conspiracy among firms to set prices for a product or service. 
E) a seller's requirement that the purchaser of one product must also buy another product in the line. 
A) an arrangement a manufacturer makes with a reseller to handle only its products and not those of a competitor. 
B) the practice of charging different prices to different buyers for goods of like grade and quality. 
C) the practice of charging a very low price for a product with the intent of driving competitors out of business. 
D) a conspiracy among firms to set prices for a product or service. 
E) a seller's requirement that the purchaser of one product must also buy another product in the line.

Question 7

Customary pricing refers to

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) setting a price that is dictated by tradition,a standardized channel of distribution,or other competitive factors. 
E) pricing based on what the market will bear. 
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) setting a price that is dictated by tradition,a standardized channel of distribution,or other competitive factors. 
E) pricing based on what the market will bear.

Question 8

Which of the following is a profit-oriented approach to pricing?

Accepted Answer

A) skimming pricing 
B) target pricing 
C) loss-leader pricing 
D) target profit pricing 
E) standard markup pricing 
A) skimming pricing 
B) target pricing 
C) loss-leader pricing 
D) target profit pricing 
E) standard markup pricing

Question 9

A single jar of original formula Carmex has different prices for the product depending upon where it is sold,but each price will end in a "9" ($0.99-mass merchandisers like Walmart or Target;$1.59-drugstores;and $1.79-grocery stores).This pricing strategy is called __________.

Accepted Answer

A) standard pricing 
B) odd-even pricing 
C) customary pricing 
D) everyday lower pricing 
E) at-market pricing 
A) standard pricing 
B) odd-even pricing 
C) customary pricing 
D) everyday lower pricing 
E) at-market pricing

Question 10

Carmex uses all of the following approaches to setting the price of its products EXCEPT:

Accepted Answer

A) profit-oriented. 
B) competition-oriented. 
C) cost-oriented. 
D) elasticity-oriented. 
E) demand-oriented. 
A) profit-oriented. 
B) competition-oriented. 
C) cost-oriented. 
D) elasticity-oriented. 
E) demand-oriented.

Question 11

Consider the photo above.Family Dollar Stores,like Dollar Value Stores and 99¢ Only Stores,use what type of pricing policy?

Accepted Answer

A) dynamic pricing 
B) customary pricing 
C) flexible pricing 
D) fixed-price 
E) at-market pricing 
A) dynamic pricing 
B) customary pricing 
C) flexible pricing 
D) fixed-price 
E) at-market pricing

Question 12

Product-line pricing refers to

Accepted Answer

A) setting the price of a line of products at a number of different specific pricing points. 
B) deliberately selling a product below its customary price,not to increase sales,but to attract customers' attention in hopes that they will buy other products as well. 
C) adding a fixed percentage to the cost of all items in a specific product class. 
D) setting of prices for all items in a product line to cover the total cost and produce a profit for the complete line,not necessarily for each item. 
E) the marketing of two or more products in a single package. 
A) setting the price of a line of products at a number of different specific pricing points. 
B) deliberately selling a product below its customary price,not to increase sales,but to attract customers' attention in hopes that they will buy other products as well. 
C) adding a fixed percentage to the cost of all items in a specific product class. 
D) setting of prices for all items in a product line to cover the total cost and produce a profit for the complete line,not necessarily for each item. 
E) the marketing of two or more products in a single package.

Question 13

Controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price is called

Accepted Answer

A) competitive collusion. 
B) price cooperation. 
C) horizontal price fixing. 
D) lateral price fixing. 
E) vertical price fixing. 
A) competitive collusion. 
B) price cooperation. 
C) horizontal price fixing. 
D) lateral price fixing. 
E) vertical price fixing.

Question 14

According to the Geographical Pricing Map A above,if the plant in Denver charges $20 to ship its products to all of the identified cities in the U.S. ,it is most likely using which type of pricing strategy?

Accepted Answer

A) FOB origin pricing 
B) multiple-zone pricing 
C) freight absorption pricing 
D) basing-point pricing 
E) single-zone pricing 
A) FOB origin pricing 
B) multiple-zone pricing 
C) freight absorption pricing 
D) basing-point pricing 
E) single-zone pricing

Question 15

Five common forms of misleading pricing include: bait and switch,bargains conditional on other purchases,comparable value comparisons,comparisons with suggested prices,and former price comparisons.What do all these practices have in common? They are all

Accepted Answer

A) most effective in the growth stage of the product life cycle. 
B) popular techniques preferred by online businesses. 
C) illegal and often difficult to prosecute. 
D) most effective in business-to-business marketing. 
E) effective pricing practices that professional marketers use. 
A) most effective in the growth stage of the product life cycle. 
B) popular techniques preferred by online businesses. 
C) illegal and often difficult to prosecute. 
D) most effective in business-to-business marketing. 
E) effective pricing practices that professional marketers use.

Question 16

If a firm estimates that its costs will fall by 10 percent each time volume doubles for its product,then the cost of the l,000th unit produced and sold will be about 90 percent of the cost of the 500th unit,and the 2,000th unit will be 90 percent of the l,000th unit.Therefore,if the cost of the 500th unit is $100,the cost of the 4,000th unit would be __________.

Accepted Answer

A) $0. 
B) $72.90. 
C) $81.00. 
D) $90.00. 
E) $100.00. 
A) $0. 
B) $72.90. 
C) $81.00. 
D) $90.00. 
E) $100.00.

Question 17

Which of the following statements about penetration pricing is most accurate?

Accepted Answer

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

Question 18

The pricing strategy that is almost the exact opposite of skimming pricing is

Accepted Answer

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

Question 19

A box of Cascade dishwasher detergent shrink-wrapped with a bottle of Jet Dry for 10 cents more than the regular price of the dishwasher detergent is an example of __________ pricing.

Accepted Answer

A) penetration 
B) prestige 
C) bundle 
D) odd-even 
E) standard mark-up 
A) penetration 
B) prestige 
C) bundle 
D) odd-even 
E) standard mark-up

Question 20

Advertising such as "Retail Value $100,Our Price $85" is deceptive if

Accepted Answer

A) a verified and substantial number of stores in the market area did not price the item at $100. 
B) even one store in that retail chain did not price the item at $100. 
C) a competitor is selling the same item for $75 on sale and their normal price is only $85. 
D) there is not enough product on hand at that price to satisfy the needs of the store's regular customer traffic. 
E) the markup on the original price is more than 200 percent. 
A) a verified and substantial number of stores in the market area did not price the item at $100. 
B) even one store in that retail chain did not price the item at $100. 
C) a competitor is selling the same item for $75 on sale and their normal price is only $85. 
D) there is not enough product on hand at that price to satisfy the needs of the store's regular customer traffic. 
E) the markup on the original price is more than 200 percent.

Exam 14: Arriving at the Final Price

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

Price-lining is considered to be a __________ approach to pricing.

Consider Figure 14-8 above.Suppose a manufacturer quotes price in the following form: List price-$100 less 30/10/5.What does "A" represent?

Prestige pricing is considered to be a __________ approach to pricing.

To reward wholesalers and retailers for marketing functions they will perform in the future,a manufacturer often gives __________ discounts.

Predatory pricing is

Customary pricing refers to

Which of the following is a profit-oriented approach to pricing?

A single jar of original formula Carmex has different prices for the product depending upon where it is sold,but each price will end in a "9" ($0.99-mass merchandisers like Walmart or Target;$1.59-drugstores;and $1.79-grocery stores).This pricing strategy is called __________.

Carmex uses all of the following approaches to setting the price of its products EXCEPT:

Consider the photo above.Family Dollar Stores,like Dollar Value Stores and 99¢ Only Stores,use what type of pricing policy?

Product-line pricing refers to

Controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price is called

According to the Geographical Pricing Map A above,if the plant in Denver charges $20 to ship its products to all of the identified cities in the U.S. ,it is most likely using which type of pricing strategy?

Five common forms of misleading pricing include: bait and switch,bargains conditional on other purchases,comparable value comparisons,comparisons with suggested prices,and former price comparisons.What do all these practices have in common? They are all

Which of the following statements about penetration pricing is most accurate?

The pricing strategy that is almost the exact opposite of skimming pricing is

A box of Cascade dishwasher detergent shrink-wrapped with a bottle of Jet Dry for 10 cents more than the regular price of the dishwasher detergent is an example of __________ pricing.

Advertising such as "Retail Value $100,Our Price $85" is deceptive if

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