Question 1

For which of the following products would a manufacturer be most likely to offer a seasonal discount?

Accepted Answer

A)  bottles of aspirin 
B)  steering wheel covers 
C)  snow parkas 
D)  fork-lifts 
E)  rolls of wallpaper

Question 2

The Vineyard is a wine store that carries wines priced at $8 per bottle, $25 per bottle, and $25 per bottle. Its owner theorizes that controlling the prices like he has makes it easier for customers who are not wine experts to make a purchase. The Vineyard uses:

Accepted Answer

A)  single-price. 
B)  odd pricing. 
C)  cash-discounting. 
D)  list pricing. 
E)  price lining.

Question 3

Gavin purchased a barbecue grill cover. There were two prices on the box that contained the cover. A printed one said the price was $15.99. A handwritten one read $10.95. Since Gavin paid the $10.95 price, you can assume that the $15.99 price printed on the grill cover box was a _____ price.

Accepted Answer

A)  marginal 
B)  discounted 
C)  suggested list 
D)  fixed 
E)  promotional allowance

Question 4

An organization should use a market-skimming strategy for a new product if:

Accepted Answer

A)  competitors have free access to the product's raw materials. 
B)  demand for the product is very elastic. 
C)  the product is not unique enough to be patented. 
D)  the new product is distinctive. 
E)  all of the above are True.

Question 5

Both the Cedartown Grooming Gallery and the local veterinarian will wash, comb, and trim your dog. Even though their prices are about the same, the Cedartown Gallery is the better deal because the animals are kept in large kennels and given access to outside areas while they wait for their owners to pick them up. The vet's office has only a few small inside kennels. In comparison with the vet's office, Cedartown Grooming Gallery is using _____ pricing.

Accepted Answer

A)  fair-trade 
B)  value 
C)  psychological 
D)  penetration 
E)  cost-plus

Question 6

Which of the following situations is the most compelling case for market-penetration pricing?

Accepted Answer

A)  Economies of scale cannot be achieved in the existing market. 
B)  A large mass market exists for the product. 
C)  The product has a highly inelastic demand. 
D)  No competition currently exists. 
E)  All of the above cases are suitable for market-penetration pricing.

Question 7

_____ pricing may be adopted to offset the competitive disadvantages of FOB factory pricing.

Accepted Answer

A)  Market-penetration 
B)  Freight-absorption 
C)  Market-skimming 
D)  Uniform delivered 
E)  Zone-delivered

Question 8

A beef-processing company that has excess capacity and high fixed costs will most likely use _____ pricing.

Accepted Answer

A)  uniform delivered 
B)  freight-absorption 
C)  market-skimming 
D)  resale price maintenance 
E)  zone-delivered

Question 9

If the manufacturer of prefabricated aluminum buildings quotes a retail price of $6,500 per structure with trade discounts of 15 percent and 40 percent for transporting and storing, the manufacturer would receive _____ in revenue.

Accepted Answer

A)  $975 
B)  $2,210 
C)  $2,925 
D)  $3,315 
E)  $3,575

Question 10

There are many marinades and barbecue sauces currently on the market. To differentiate Stroh Ranch Marinade from all of the others on the market and to increase demand for the product, Jeanette Stroh includes a recipe booklet with each bottle of marinade she sells. This is an example of:

Accepted Answer

A)  price competition. 
B)  economic diversification. 
C)  market control. 
D)  nonprice competition. 
E)  price fixing.

Question 11

A silk-screener who attempts to shift the demand curve for his T-shirts to the right by means of product differentiation is engaged in _____ competition.

Accepted Answer

The answer of A silk-screener who attempts to shift the...

Question 12

Unfair-practices acts written to regulate leader pricing:

Accepted Answer

A)  do not provide the lowest possible costs for consumers. 
B)  eliminate all predatory pricing. 
C)  protect low-cost retailers. 
D)  have, for the most part, been declared unconstitutional. 
E)  exist in all 50 states.

Question 13

Which of the following is an example of how a weight-loss clinic could use nonprice competition?

Accepted Answer

A)  It could offer free classes on how to monitor fat in your diet. 
B)  It could give quantity discounts to family members who participate in the clinic's program with you. 
C)  It could stage a two-for-one sale. 
D)  It could charge less for diet pills and diet food purchased during December. 
E)  It could feature the lowest prices in the community on diet supplements.

Question 14

A homesick South African student received a telemarketing call last night that offered him unlimited international calls for a monthly fee of $39.95. This is an example of _____ pricing.

Accepted Answer

A)  variable 
B)  flat-rate 
C)  uniform delivered 
D)  flexible 
E)  prestige

Question 15

When Givenchy introduced Amarige de Givenchy, it set a relatively high price for the new cologne. This is an example of a _____ strategy.

Accepted Answer

The answer of When Givenchy introduced Amarige de Givenchy, it...

Question 16

Whenaselleroffersacashdiscountwithtermsof3/10,n/60,thismeans:

Accepted Answer

A) the buyer gets adiscount of 10 percent if the bill is paid within 3 days; otherwise theentire amount is due in 60 days. 
B) payment is due in 10 days, or else there is a 3 percent late-paymentpenalty. 
C) payment is due in 60 days, or else there is a 3percent late-paymentpenalty. 
D) the buyer gets adiscount of 3 percent if the billis paid within 10 days; otherwise the entire amount is due in 60days. 
E) if the buyer pays within 60 days, there is a 3 percent discount; beyond that is a10-day grace period before there is apenalty.

Question 17

When a seller uses FOB factory pricing,:

Accepted Answer

A)  all buyers pay a uniform delivery cost. 
B)  the delivered price is the same to all buyers. 
C)  there is a phantom freight charge. 
D)  buyers located near the seller have no price advantage over buyers located farther away. 
E)  the buyer pays all the freight charges.

Question 18

Penetration pricing would be appropriate for a company introducing a new arthritis drug that was intended to capture at least 15 percent of the target market during its first 18 months of availability.

Accepted Answer

A) True 
 B)False

Question 19

A trade discount is also known as a _____ discount.

Accepted Answer

A)  functional 
B)  relational 
C)  reseller 
D)  manufacturer's 
E)  barter

Question 20

A manufacturer of freestanding ovens offers trade discounts of 35 percent and 15 percent in return for transporting and storing the ovens. The manufacturer has set a retail price of $599 for each oven. For each oven sold, the manufacturer would receive _____ in revenue.

Accepted Answer

The answer of A manufacturer of freestanding ovens offers trade...

Exam 13: Pricing Strategies