Question 1

Most firms have no trouble estimating the demand and cost functions for their products.

Accepted Answer

A) True 
 B)False

Question 2

The decline in the average cost of production with accumulated production experience is called the ________.

Accepted Answer

A) demand curve 
B) cost curve 
C) learning curve 
D) cost target 
E) indifference band

Question 3

When is price discrimination legal?

Accepted Answer

The answer of When is price discrimination legal?...

Question 4

Florida hotels discount the cost of their hotel rooms during the hot summer months.On the other hand,during the winter months,the price of these rooms increases.This is an example of what type of discount?

Accepted Answer

A) Seasonal 
B) Functional 
C) Quantity 
D) Promotional allowance 
E) None of the above

Question 5

________ differ greatly depending upon the level of production.

Accepted Answer

A) Fixed costs 
B) Adjusted costs 
C) Attributed costs 
D) Unknown costs 
E) Variable costs

Question 6

The demand for your product fell 66% when the price increased by 50%.This is an example of what type of demand?

Accepted Answer

A) Coefficient 
B) Inelastic 
C) Elastic 
D) Unitary 
E) none of the above

Question 7

A firm must consider many factors in setting its pricing policy.We list these as a six-step process.Which of the following is NOT one of these steps?

Accepted Answer

A) Determining demand 
B) Selecting the pricing objective 
C) Researching reference prices in the target market 
D) Selecting the final price 
E) Selecting a pricing method

Question 8

A firm first decides where it wants to position its market offering.A company can pursue any of five major objectives through pricing.Which of the following is NOT one of these objectives?

Accepted Answer

A) Predatory pricing 
B) Survival 
C) Maximum current profit 
D) Maximum market share 
E) Product-quality leadership

Question 9

Pricing methods narrow the range from which the company selects its final price.In selecting that price,the company must consider additional factors,including the impact of other marketing activities,company pricing policies,gain-and-risk-sharing pricing,and the impact of price on ________.

Accepted Answer

A) other parties 
B) channels of distribution 
C) channel partners 
D) marketing activities 
E) none of the above

Question 10

The key to perceived-value pricing is to deliver more value than your competitors and to ________ this to prospective buyers.

Accepted Answer

A) demonstrate 
B) communicate 
C) advertise 
D) promote 
E) convince

Question 11

Explain why and how the Internet is partially reversing the fixed price concept of retailing?

Accepted Answer

The answer of Explain why and how the Internet is...

Question 12

When a company initiates a price cut in an attempt to dominate the market through lower costs (such as the $1.00 special lunch menus at key fast-food restaurants),the company must ensure that it does not fall into certain low-cost traps.List these four "traps."

Accepted Answer

The answer of When a company initiates a price cut...

Question 13

How would you explain the concept of "price elasticity" to a co-worker?

Accepted Answer

The answer of How would you explain the concept of...

Question 14

Management need not consider how the marketing/distribution channels will react to its pricing policies.

Accepted Answer

A) True 
 B)False

Question 15

Consumers ________ low-cost products or items they buy infrequently.

Accepted Answer

A) prefer the lowest total cost of ownership of 
B) remember prices of 
C) are ambivalent to prices of 
D) are more price sensitive to 
E) are less price sensitive to

Question 16

Trying to maximize market share,a firm would be best served to use a market-skimming pricing strategy.

Accepted Answer

A) True 
 B)False

Question 17

Nonprofit organizations have the same pricing objectives as private enterprise.

Accepted Answer

A) True 
 B)False

Question 18

Price elasticities are higher for individual items than for overall brands.

Accepted Answer

A) True 
 B)False

Question 19

Price discrimination in all forms is illegal in the United States.

Accepted Answer

A) True 
 B)False

Question 20

Companies prefer customers who are less price sensitive.

Accepted Answer

A) True 
 B)False

Exam 14: Developing Pricing Strategies and Programs

Most firms have no trouble estimating the demand and cost functions for their products.

The decline in the average cost of production with accumulated production experience is called the ________.

When is price discrimination legal?

Florida hotels discount the cost of their hotel rooms during the hot summer months.On the other hand,during the winter months,the price of these rooms increases.This is an example of what type of discount?

________ differ greatly depending upon the level of production.

The demand for your product fell 66% when the price increased by 50%.This is an example of what type of demand?

A firm must consider many factors in setting its pricing policy.We list these as a six-step process.Which of the following is NOT one of these steps?

A firm first decides where it wants to position its market offering.A company can pursue any of five major objectives through pricing.Which of the following is NOT one of these objectives?

Pricing methods narrow the range from which the company selects its final price.In selecting that price,the company must consider additional factors,including the impact of other marketing activities,company pricing policies,gain-and-risk-sharing pricing,and the impact of price on ________.

The key to perceived-value pricing is to deliver more value than your competitors and to ________ this to prospective buyers.

Explain why and how the Internet is partially reversing the fixed price concept of retailing?

When a company initiates a price cut in an attempt to dominate the market through lower costs (such as the $1.00 special lunch menus at key fast-food restaurants),the company must ensure that it does not fall into certain low-cost traps.List these four "traps."

How would you explain the concept of "price elasticity" to a co-worker?

Management need not consider how the marketing/distribution channels will react to its pricing policies.

Consumers ________ low-cost products or items they buy infrequently.

Trying to maximize market share,a firm would be best served to use a market-skimming pricing strategy.

Nonprofit organizations have the same pricing objectives as private enterprise.

Price elasticities are higher for individual items than for overall brands.

Price discrimination in all forms is illegal in the United States.

Companies prefer customers who are less price sensitive.