Question 1

Figure 11-6
-A break-even chart is a graphic presentation

Accepted Answer

A)   that shows the maximum number of units that will be sold at a certain price.
B)   of a break-even analysis that shows where total revenue and total cost intersect to identify profit or loss for a given quantity sold.
C)   that relates variable costs in terms of product or service substitutes in order to determine which items or services would least affect total revenues.
D)   that relates profits and revenues versus total costs in order to determine the time frame in which a company could achieve profitability.
E)   is a form of scatter graph used to identify specific activities or items that are creating the greatest return on investment.F) None of the above
G) A) and D)

Question 2

There are four common approaches to selecting an approximate price level. List and provide a brief description for each one.

Accepted Answer

Four common approaches to helping find t...

Question 3

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.F) None of the above
G) B) and C)

Question 4

Which of the following best illustrates a shift in the demand curve?

Accepted Answer

A)   When prices remain the same, there is a significant change in supply.
B)   As the price is raised, the quantity demanded increases, assuming all else stays the same.
C)   When prices remain the same, there is an increase or decrease in demand.
D)   As the price is lowered, the quantity demanded decreases, assuming all else stays the same.
E)   An internal matter has forced a price change of some type, but it does not impact demand.F) A) and B)
G) A) and C)

Question 5

If a firm finds the demand for one of its products is inelastic, it can increase its total revenues by

Accepted Answer

A)   lowering its price.
B)   increasing fixed costs only.
C)   increasing variable costs only.
D)   increasing both fixed and variable costs.
E)   raising its price.F) C) and E)
G) None of the above

Question 6

What type of discount would Toro, a domestic yard machinery company, most likely offer its channel members to carry and sell its riding lawn mowers during the winter?

Accepted Answer

A)   quantity discounts
B)   distribution discounts
C)   trade discounts
D)   seasonal discounts
E)   functional discountsF) All of the above
G) A) and E)

Question 7

Which of the following statements about the product life cycle as a pricing constraint is most accurate?

Accepted Answer

A)   The newer a product is, the higher the price that can usually be charged.
B)   The later in the product life cycle a product is, the higher the price that can usually be charged.
C)   Once a product is considered nostalgic, the price will continue to rise indefinitely.
D)   Fads will generally have only two price points-high and low-but the values of those price points usually will be within 10 percent of each other.
E)   Prices should not be changed until a product reaches its maturity stage.F) D) and E)
G) A) and C)

Question 8

Forever Quilting makes quilting kits priced at $120. The costs of the materials that go into each kit total $45. It costs $5 in labor to assemble a kit. The company has monthly expenses of $1,000 for rent and insurance, $200 for heat and electricity, $500 for advertising, and $4,500 for the monthly salary of its owner. Forever Quilting's unit variable cost for its kits is

Accepted Answer

A)   $5.
B)   $45.
C)   $50.
D)   $120.
E)   $170.F) B) and D)
G) A) and E) C

Question 9

A reference value is developed by the consumer through

Accepted Answer

A)   considering the amount of time and energy a consumer puts into the purchase process.
B)   judging similar items used by the consumer's peers.
C)   performing a careful break-even analysis.
D)   comparing the costs and benefits of substitute items.
E)   examining the true difference between customers' "needs" and "wants."F) C) and E)
G) A) and D)

Question 10

Rather than billing clients by the hour, some lawyers and their clients agree on a fixed fee based on expected costs plus an agreed upon level of profit for the law firm. Which pricing approach are they using?

Accepted Answer

A)   target pricing
B)   cost-plus pricing
C)   customary pricing
D)   experience curve pricing
E)   bundle pricingF) A) and C)
G) A) and B)

Question 11

Swedish company Asko, which prides itself on manufacturing and marketing some of the best-built and most prestigious appliances in the world, would probably use which competition-oriented pricing approach?

Accepted Answer

A)   customary pricing
B)   above-market pricing
C)   loss-leader pricing
D)   target profit pricing
E)   penetration pricingF) A) and D)
G) D) and E)

Question 12

Which of the following statements regarding odd-even pricing is most accurate?

Accepted Answer

A)   Odd-even pricing is designed to give the consumer a better set of pricing alternatives.
B)   Odd-even pricing can be used in conjunction with a skimming pricing strategy, but should not be used with a penetration pricing strategy.
C)   Odd-even pricing does not work if the product is health care-related.
D)   Overuse of odd-even prices tends to mute its effect on demand.
E)   Odd-even prices are best used with large ticket items; it loses its effectiveness with moderate- to low-ticket items.F) A) and E)
G) A) and D)

Question 13

Suppose you want to buy a Tesla Model S, an all-electric, zero-emission car that has a 265-mile range and can be recharged in three hours. The Tesla Model S Performance model has a list price of $87,500. However, you want several options (Performance Plus Package, red multicoat armor paint, Tech Package, Sound Studio Package, home charging station, performance wheels, and others)  that will cost $17,500. An extended warranty will add an additional $5,000. However, if you put $50,000 down now and finance the balance over the next year, you will receive a dealer rebate of $5,000 off the list price. The dealer will give you a $7,000 trade-in allowance for your 2013 Honda Civic DX four-door sedan. In addition, you will have to pay a state sales tax of $10,000, an auto registration fee of $1,000 to the state, and a $1,000 destination charge to ship and prep the car. But because the Tesla Model S is an alternative energy vehicle, you qualify for a $2,500 state rebate and a $7,500 federal tax credit! Finally, your total finance charge is $7,000. Applying the price equation, what is your final price for the Tesla Model S?

Accepted Answer

A)   $57,000
B)   $68,000
C)   $87,500
D)   $107,000
E)   $151,000F) A) and D)
G) B) and E) D

Question 14

Which of the following statements is most accurate?

Accepted Answer

A)   For some products, price influences the perception of overall quality, and ultimately value, to consumers.
B)   A consumer's view of a product's value depends almost entirely on external assessments of quality.
C)   A consumer's view of value is a function of his or her education and income.
D)   Price plays only a small part in a consumer's perceived value of a product or service.
E)   Price plays a large role in assessing value but a very minor role in assessing quality.F) All of the above
G) A) and B)

Question 15

The ratio of ________ to price is referred to as value.

Accepted Answer

A)   prestige
B)   perceived benefits
C)   costs
D)   anticipated quality
E)   profitsF) A) and B)
G) C) and D) B

Question 16

The horizontal axis of a demand curve graph represents

Accepted Answer

A)   market growth rate.
B)   relative market share.
C)   price per unit.
D)   potential profit in dollars.
E)   quantity demanded.F) A) and E)
G) B) and E)

Question 17

You are president of an electric appliance manufacturer. You want to reduce your break-even quantity. All things being equal, you can do this by

Accepted Answer

A)   increasing the quantity sold, while keeping price unchanged.
B)   reducing marginal revenue.
C)   reducing unit variable cost.
D)   increasing fixed cost.
E)   increasing total cost.F) A) and B)
G) A) and C)

Question 18

Price discrimination is

Accepted Answer

A)   the practice of charging different prices to different buyers for goods of like grade and quality.
B)   an arrangement a manufacturer makes with a reseller to handle only its products and not those of a competitor.
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 also buy another product in the line.F) None of the above
G) A) and C)

Question 19

Determining cost, volume, and profit relationships would occur during which stage of the price-setting process?

Accepted Answer

A)   Defining the scope of the product
B)   Selecting an approximate price level
C)   Setting the list or quoted price
D)   Evaluating the success of the price strategy
E)   Making special adjustments to the list priceF) B) and D)
G) All of the above

Question 20

The owner of a small restaurant that sells takeout fried chicken and biscuits each month pays $2,500 in rent, $500 in utilities, $750 interest on his loan, insurance premium of $200, and $250 on advertising on local buses. A bucket of chicken is priced at $9.50. Unit variable costs for the bucket of chicken are $5.50. How many buckets of chicken does the restaurant need to sell to break even each month?

Accepted Answer

A)   442 buckets
B)   764 buckets
C)   1,050 buckets
D)   3,150 buckets
E)   4,200 bucketsF) A) and C)
G) A) and D)

Exam 11: Pricing Products and Services

Figure 11-6 -A break-even chart is a graphic presentation

Correct Answer
verified

There are four common approaches to selecting an approximate price level. List and provide a brief description for each one.

Correct Answer
verified
Four common approaches to helping find t...
View Answer

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

Correct Answer
verified

Which of the following best illustrates a shift in the demand curve?

Correct Answer
verified

If a firm finds the demand for one of its products is inelastic, it can increase its total revenues by

Correct Answer
verified

What type of discount would Toro, a domestic yard machinery company, most likely offer its channel members to carry and sell its riding lawn mowers during the winter?

Correct Answer
verified

Which of the following statements about the product life cycle as a pricing constraint is most accurate?

Correct Answer
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Correct Answer
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C

A reference value is developed by the consumer through

Correct Answer
verified

Rather than billing clients by the hour, some lawyers and their clients agree on a fixed fee based on expected costs plus an agreed upon level of profit for the law firm. Which pricing approach are they using?

Correct Answer
verified

Swedish company Asko, which prides itself on manufacturing and marketing some of the best-built and most prestigious appliances in the world, would probably use which competition-oriented pricing approach?

Correct Answer
verified

Which of the following statements regarding odd-even pricing is most accurate?

Correct Answer
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Correct Answer
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D

Which of the following statements is most accurate?

Correct Answer
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The ratio of ________ to price is referred to as value.

Correct Answer
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B

The horizontal axis of a demand curve graph represents

Correct Answer
verified

You are president of an electric appliance manufacturer. You want to reduce your break-even quantity. All things being equal, you can do this by

Correct Answer
verified

Price discrimination is

Correct Answer
verified

Determining cost, volume, and profit relationships would occur during which stage of the price-setting process?

Correct Answer
verified

Correct Answer
verified

Exam 11: Pricing Products and Services

Figure 11-6 -A break-even chart is a graphic presentation

Correct AnswerverifiedShow Answer

There are four common approaches to selecting an approximate price level. List and provide a brief description for each one.

Correct AnswerverifiedFour common approaches to helping find t...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following best illustrates a shift in the demand curve?

Correct AnswerverifiedShow Answer

If a firm finds the demand for one of its products is inelastic, it can increase its total revenues by

Correct AnswerverifiedShow Answer

What type of discount would Toro, a domestic yard machinery company, most likely offer its channel members to carry and sell its riding lawn mowers during the winter?

Correct AnswerverifiedShow Answer

Which of the following statements about the product life cycle as a pricing constraint is most accurate?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedC

A reference value is developed by the consumer through

Correct AnswerverifiedShow Answer

Rather than billing clients by the hour, some lawyers and their clients agree on a fixed fee based on expected costs plus an agreed upon level of profit for the law firm. Which pricing approach are they using?

Correct AnswerverifiedShow Answer

Swedish company Asko, which prides itself on manufacturing and marketing some of the best-built and most prestigious appliances in the world, would probably use which competition-oriented pricing approach?

Correct AnswerverifiedShow Answer

Which of the following statements regarding odd-even pricing is most accurate?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedD

Which of the following statements is most accurate?

Correct AnswerverifiedShow Answer

The ratio of ________ to price is referred to as value.

Correct AnswerverifiedB

The horizontal axis of a demand curve graph represents

Correct AnswerverifiedShow Answer

You are president of an electric appliance manufacturer. You want to reduce your break-even quantity. All things being equal, you can do this by

Correct AnswerverifiedShow Answer

Price discrimination is

Correct AnswerverifiedShow Answer

Determining cost, volume, and profit relationships would occur during which stage of the price-setting process?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Four common approaches to helping find t...
View Answer

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C

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D

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B

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