Question 1

Price is the cash expenditure plus taxes that consumers have to pay for a good or service.

Accepted Answer

A) True 
 B)False

Question 2

All of the following are included in the five Cs of pricing except

Accepted Answer

A)   customers.
B)   channel members.
C)   cost.
D)   collaboration.
E)   company objectives.

Question 3

For which of the following is demand likely to be most sensitive to price increases?

Accepted Answer

A)   prescription drugs
B)   college tuition for last-semester seniors
C)   electricity
D)   hospital care
E)   a specific brand of soft drink

Question 4

Because there are many firms with similar products in purely competitive markets,

Accepted Answer

A)   price is determined by the laws of supply and demand.
B)   consumers develop personal preferences.
C)   firms find it easy to build strong, distinct brands.
D)   advertising is heavily used.
E)   the many competitors will focus on variable cost pricing.

Question 5

American Airlines just reduced its fares for summer flights by
$100.00.00.Delta Airlines changes its pricing structure and reduces its flights by $100 as well.Delta is employing status quo pricing.

Accepted Answer

A) True 
 B)False

Question 6

One problem in relying on price elasticity and demand curves when setting prices is

Accepted Answer

A)   the way a product or service is marketed can have a profound impact on price elasticity.
B)   the underlying ideas of the demand curve and elasticity are less relevant in the modern economy.
C)   only economists can properly analyze demand curves and set prices using this tool.
D)   competitors can construct the same demand curves, so there is no advantage in using them.
E)   marketing split from economics over the ideas of demand and elasticity.

Question 7

Many years ago Honda's Accord and Ford's Taurus were the two top-selling cars in the United States.As the year was coming to an end,Ford cut the price of the Taurus,hoping to outsell the Accord and allow Ford to claim that "Taurus is the best-selling car in America." Ford was using a _______ pricing strategy.

Accepted Answer

A)   maximizing profits
B)   target profit
C)   sales orientation
D)   status quo
E)   target return

Question 8

Margaret has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host.Since she does not know much about wine,she will likely use the price of the wines as

Accepted Answer

A)   an indicator of quality.
B)   a reflection of status quo pricing.
C)   an indicator of the variety.
D)   a measure of scarcity.
E)   a measure of the income effect.

Question 9

A customer orientation toward pricing implicitly invokes the concept of

Accepted Answer

A)   knowing the dimensions of the target market.
B)   positioning.
C)   the income effect.
D)   value.
E)   profit.

Question 10

Earl was known for driving 30 miles just to save a dollar on the price of his favorite beverage.Earl perceived price as _______ for a good or service,while most consumers recognize price as the _______ made to acquire a good or service.

Accepted Answer

A)   the money paid; overall sacrifice
B)   a variable cost; fixed cost
C)   a fixed cost; variable payment
D)   the overall sacrifice; monetary payment
E)   the break-even amount; total cost

Question 11

All of the following are included in the full price of a product or service except

Accepted Answer

A)   taxes.
B)   shipping.
C)   travel costs.
D)   the price of alternative products and services.
E)   value of the consumer's time.

Question 12

Raymond estimates that the fixed costs associated with opening a new bank branch are $500 ,000.He expects the branch to attract 1,000 new customer accounts in the first year,each of which will cost $50 per year to service.He also expects to generate $100,000 per year in revenue.For Raymond,the total cost of opening the new branch and remaining open for one year will be

Accepted Answer

A)   $500,000.
B)   $550,000.
C)   $650,000.
D)   $450,000.
E)   $605,000.

Question 13

Fenton has always used standard markups to determine the prices for his clothing products.You are advising him to change his pricing strategy.What advice would you give Fenton?

Accepted Answer

You would likely advise him to...

Question 14

How can a company find its way out of a market characterized by pure competition?

Accepted Answer

A)   consistently offer the lowest price until other competitors leave the market
B)   increase prices and attract different, quality-oriented customers
C)   decrease the amount of available product until the market reacts
D)   increase the amount of available product to flood the market
E)   differentiate the product in some way, even by packaging, so customers will see it as distinct

Question 15

At the break-even point,profits are maximized.

Accepted Answer

A) True 
 B)False

Question 16

A demand curve is built on the assumption that

Accepted Answer

A)   income is derived from demand.
B)   price remains the same, and fixed costs change.
C)   everything but price and demand remains the same.
D)   fixed costs change with quantity demanded.
E)   the firm does not advertise.

Question 17

Gary is the marketing manager for an automobile dealership.His boss tells him the firm's primary goal is to increase its local market share from 15 to 30 percent.His firm is using a ________ orientation.

Accepted Answer

A)   profit
B)   sales
C)   competitive
D)   customer satisfaction
E)   product development

Question 18

Ryan gave the manager of his convenience store a set of binoculars so she could see the gasoline prices charged by the other convenience store at that intersection.Ryan told the manager to always match the gasoline prices of the other store.Ryan is using a _______ pricing strategy.

Accepted Answer

A)   maximizing profits
B)   target profit
C)   target return
D)   status quo
E)   sales

Question 19

In _______ many firms provide similar products that are considered substitutes for each other.

Accepted Answer

A)   pure competition
B)   oligopolistic competition
C)   monopolistic competition
D)   a monopoly
E)   a duopoly

Question 20

Diana owns a boutique specializing in ball gowns.Sales are stable and Diana feels it is time she had a 20 percent increase in her salary.If Diana takes this increase in compensation,it will decrease the break-even quantity of gowns she needs to sell on a monthly basis.

Accepted Answer

A) True 
 B)False

Exam 14: Pricing Concepts for Establishing Value

Diana owns a boutique specializing in ball gowns.Sales are stable and Diana feels it is time she had a 20 percent increase in her salary.If Diana takes this increase in compensation,it will decrease the break-even quantity of gowns she needs to sell on a monthly basis.

Correct Answer
verified

All of the following are included in the full price of a product or service except

Correct Answer
verified

All of the following are included in the five Cs of pricing except

Correct Answer
verified

Because there are many firms with similar products in purely competitive markets,

Correct Answer
verified

How can a company find its way out of a market characterized by pure competition?

Correct Answer
verified

For which of the following is demand likely to be most sensitive to price increases?

Correct Answer
verified

A customer orientation toward pricing implicitly invokes the concept of

Correct Answer
verified

Earl was known for driving 30 miles just to save a dollar on the price of his favorite beverage.Earl perceived price as _ for a good or service,while most consumers recognize price as the _ made to acquire a good or service.

Correct Answer
verified

Correct Answer
verified

A demand curve is built on the assumption that

Correct Answer
verified

Gary is the marketing manager for an automobile dealership.His boss tells him the firm's primary goal is to increase its local market share from 15 to 30 percent.His firm is using a ________ orientation.

Correct Answer
verified

Margaret has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host.Since she does not know much about wine,she will likely use the price of the wines as

Correct Answer
verified

In _______ many firms provide similar products that are considered substitutes for each other.

Correct Answer
verified

Correct Answer
verified

At the break-even point,profits are maximized.

Correct Answer
verified

Fenton has always used standard markups to determine the prices for his clothing products.You are advising him to change his pricing strategy.What advice would you give Fenton?

Correct Answer
verified
You would likely advise him to...
View Answer

Ryan gave the manager of his convenience store a set of binoculars so she could see the gasoline prices charged by the other convenience store at that intersection.Ryan told the manager to always match the gasoline prices of the other store.Ryan is using a _______ pricing strategy.

Correct Answer
verified

Price is the cash expenditure plus taxes that consumers have to pay for a good or service.

Correct Answer
verified

One problem in relying on price elasticity and demand curves when setting prices is

Correct Answer
verified

American Airlines just reduced its fares for summer flights by $100.00.00.Delta Airlines changes its pricing structure and reduces its flights by $100 as well.Delta is employing status quo pricing.

Correct Answer
verified

Exam 14: Pricing Concepts for Establishing Value

Diana owns a boutique specializing in ball gowns.Sales are stable and Diana feels it is time she had a 20 percent increase in her salary.If Diana takes this increase in compensation,it will decrease the break-even quantity of gowns she needs to sell on a monthly basis.

Correct AnswerverifiedShow Answer

All of the following are included in the full price of a product or service except

Correct AnswerverifiedShow Answer

All of the following are included in the five Cs of pricing except

Correct AnswerverifiedShow Answer

Because there are many firms with similar products in purely competitive markets,

Correct AnswerverifiedShow Answer

How can a company find its way out of a market characterized by pure competition?

Correct AnswerverifiedShow Answer

For which of the following is demand likely to be most sensitive to price increases?

Correct AnswerverifiedShow Answer

A customer orientation toward pricing implicitly invokes the concept of

Correct AnswerverifiedShow Answer

Earl was known for driving 30 miles just to save a dollar on the price of his favorite beverage.Earl perceived price as _______ for a good or service,while most consumers recognize price as the _______ made to acquire a good or service.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A demand curve is built on the assumption that

Correct AnswerverifiedShow Answer

Gary is the marketing manager for an automobile dealership.His boss tells him the firm's primary goal is to increase its local market share from 15 to 30 percent.His firm is using a ________ orientation.

Correct AnswerverifiedShow Answer

Margaret has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host.Since she does not know much about wine,she will likely use the price of the wines as

Correct AnswerverifiedShow Answer

In _______ many firms provide similar products that are considered substitutes for each other.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

At the break-even point,profits are maximized.

Correct AnswerverifiedShow Answer

Fenton has always used standard markups to determine the prices for his clothing products.You are advising him to change his pricing strategy.What advice would you give Fenton?

Correct AnswerverifiedYou would likely advise him to...View AnswerShow Answer

Ryan gave the manager of his convenience store a set of binoculars so she could see the gasoline prices charged by the other convenience store at that intersection.Ryan told the manager to always match the gasoline prices of the other store.Ryan is using a _______ pricing strategy.

Correct AnswerverifiedShow Answer

Price is the cash expenditure plus taxes that consumers have to pay for a good or service.

Correct AnswerverifiedShow Answer

One problem in relying on price elasticity and demand curves when setting prices is

Correct AnswerverifiedShow Answer

American Airlines just reduced its fares for summer flights by $100.00.00.Delta Airlines changes its pricing structure and reduces its flights by $100 as well.Delta is employing status quo pricing.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Earl was known for driving 30 miles just to save a dollar on the price of his favorite beverage.Earl perceived price as _ for a good or service,while most consumers recognize price as the _ made to acquire a good or service.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
You would likely advise him to...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified