Question 1

Price discrimination is permitted under which of the following conditions?

Accepted Answer

A)  when a manufacturer and reseller have agreed upon a specified retail price for a product
B)  when a manufacturer sells to retailers in different markets
C)  if a seller can prove its costs per unit are different when selling to different retailers
D)  if a seller advertises prices that are not actually available to consumers
E)  if a seller has not communicated with competitors before announcing prices C

Question 2

All of the following conditions support market-penetration pricing EXCEPT which one?

Accepted Answer

A)  The market must be highly price sensitive.
B)  Production and distribution costs must fall as sales volume increases.
C)  The product's quality and image must support the price.
D)  The low price must help keep out the competition.
E)  A low price will produce more market growth. C

Question 3

A company faces fixed costs of $100 000 and variable costs of $8.00\unit.They plan to directly sell their product to the market for $12.00.How many units must they produce and sell to break even?

Accepted Answer

A)  20 000
B)  25 000
C)  40 000
D)  50 000
E)  not enough information to calculate B

Question 4

Deceptive pricing occurs when a seller states prices or price savings that mislead consumers or are not actually available to consumers.

Accepted Answer

A) True 
 B)False

Question 5

For consumers,the number '9' at the end of a price often signals a bargain

Accepted Answer

A) True 
 B)False

Question 6

Market-skimming is a more popular strategy for pricing new products,while market-penetration is a more popular strategy for pricing products that are more advanced in the product life-cycle.

Accepted Answer

A) True 
 B)False

Question 7

Market-skimming pricing is practiced by companies that set a low initial price in order to get their 'foot in the door' quickly and deeply,attract a large number of buyers quickly and win a large market share.

Accepted Answer

A) True 
 B)False

Question 8

EDLP is very similar to high-low pricing.

Accepted Answer

A) True 
 B)False

Question 9

In ________,price is considered along with the other marketing mix variables before the marketing program is set.

Accepted Answer

A)  target return pricing
B)  value-based pricing
C)  variable costs
D)  price elasticity
E)  cost-based pricing

Question 10

If demand hardly changes with a small change in price,we say the demand is ________.

Accepted Answer

A)  variable
B)  inelastic
C)  value-based
D)  at breakeven pricing
E)  market penetrating

Question 11

A breakeven chart shows the total cost and total revenue expected at various sales volume levels.

Accepted Answer

A) True 
 B)False

Question 12

The Sydney Opera House charges different prices for seats in different areas of the concert hall,even though the costs of supplying these seats are the same.What is this form of pricing called?

Accepted Answer

A)  location-based pricing
B)  price skimming
C)  functional pricing
D)  customer-segment pricing
E)  dynamic pricing

Question 13

Price is the only element in the marketing mix that produces ________.

Accepted Answer

A)  revenue
B)  variable costs
C)  expenses
D)  fixed costs
E)  stability

Question 14

When a house mover also sells boxes and padding that are used in safely moving a household's furniture,the company is practicing by-product pricing.

Accepted Answer

A) True 
 B)False

Question 15

Price setting is usually determined by ________ in large companies.

Accepted Answer

A)  top management
B)  divisional managers
C)  product-line managers
D)  purchasing departments
E)  both B and C

Question 16

Under ________ competition,the market consists of many buyers and sellers trading in a uniform commodity.

Accepted Answer

The answer of Under ________ competition,the market consists of many...

Question 17

The company designs what it considers to be a good product,totals the expenses of making the product and sets a price that adds a standard mark-up to the cost of the product.This approach to pricing is called ________ pricing.

Accepted Answer

A)  value-based
B)  fixed cost
C)  cost-plus
D)  variable
E)  skimming

Question 18

In service industries,captive-market pricing is called ________ - ________ pricing.

Accepted Answer

The answer of In service industries,captive-market pricing is called ________...

Question 19

Which of the following is an external factor that affects pricing decisions?

Accepted Answer

A)  the wages of production workers
B)  the economy
C)  the salaries of management
D)  profit objectives
E)  the company's marketing strategy

Question 20

A quantity discount is a price reduction to buyers who purchase ________.

Accepted Answer

A)  frequently
B)  large volumes
C)  close-outs
D)  'seconds'
E)  rarely

Exam 9: Developing New Products and Managing the Product

Price discrimination is permitted under which of the following conditions?

All of the following conditions support market-penetration pricing EXCEPT which one?

A company faces fixed costs of $100 000 and variable costs of $8.00\unit.They plan to directly sell their product to the market for $12.00.How many units must they produce and sell to break even?

Deceptive pricing occurs when a seller states prices or price savings that mislead consumers or are not actually available to consumers.

For consumers,the number '9' at the end of a price often signals a bargain

Market-skimming is a more popular strategy for pricing new products,while market-penetration is a more popular strategy for pricing products that are more advanced in the product life-cycle.

Market-skimming pricing is practiced by companies that set a low initial price in order to get their 'foot in the door' quickly and deeply,attract a large number of buyers quickly and win a large market share.

EDLP is very similar to high-low pricing.

In ________,price is considered along with the other marketing mix variables before the marketing program is set.

If demand hardly changes with a small change in price,we say the demand is ________.

A breakeven chart shows the total cost and total revenue expected at various sales volume levels.

The Sydney Opera House charges different prices for seats in different areas of the concert hall,even though the costs of supplying these seats are the same.What is this form of pricing called?

Price is the only element in the marketing mix that produces ________.

When a house mover also sells boxes and padding that are used in safely moving a household's furniture,the company is practicing by-product pricing.

Price setting is usually determined by ________ in large companies.

Under ________ competition,the market consists of many buyers and sellers trading in a uniform commodity.

The company designs what it considers to be a good product,totals the expenses of making the product and sets a price that adds a standard mark-up to the cost of the product.This approach to pricing is called ________ pricing.

In service industries,captive-market pricing is called - pricing.

Which of the following is an external factor that affects pricing decisions?

A quantity discount is a price reduction to buyers who purchase ________.