Question 1

Which of the following statements about penetration pricing is most accurate?

Accepted Answer

A)   Penetration pricing is a profit-oriented approach to pricing.
B)   Penetration pricing is a cost-oriented pricing method.
C)   Penetration pricing encourages competitors to enter a market.
D)   Penetration pricing is more effective in a marketplace with price-sensitive consumers.
E)   Penetration pricing usually precedes a skimming pricing.F) C) and D)
G) A) and B)

Question 2

Bob Biltmore owns dozens of successful print shops in the Midwest.Biltmore's shops specialize in low-cost,black-and-white copies and feature user-friendly machines consumers can easily operate.In recent months,Biltmore has noticed more competition near his stores.In an attempt to eliminate the competition,Biltmore has decided to charge a very low price for his black-and-white copies,a price so low his competitors will be forced to close.After that,Biltmore plans to raise copy prices.He plans to engage in the illegal and unethical practice of

Accepted Answer

A)   price fixing.
B)   price inflation.
C)   deceptive pricing.
D)   competitive pricing.
E)   predatory pricing.F) B) and E)
G) All of the above

Question 3

Creative marketers engage in value-pricing,which is the practice of simultaneously __________ while maintaining or decreasing price.

Accepted Answer

A)   promoting specific product and service benefits
B)   increasing product and service benefits
C)   decreasing profit
D)   analyzing benefits
E)   decreasing costF) A) and E)
G) C) and D)

Question 4

Figure 11-2 
-Figure 11-2 represents the four approaches to selecting an appropriate price level.Box B includes standard markup and cost-plus so it represents which approach?

Accepted Answer

A)   demand-oriented approach
B)   profit-oriented approach
C)   competition-oriented approach
D)   results-oriented approach
E)   cost-oriented approachF) B) and D)
G) A) and B)

Question 5

Bundle pricing is considered to be a __________ pricing practice.

Accepted Answer

A)   demand-oriented
B)   cost-oriented
C)   profit-oriented
D)   competition-oriented
E)   product line-orientedF) B) and E)
G) A) and B)

Question 6

What type of discount to resellers is based in part on where they are in the channel?

Accepted Answer

A)   seasonal discounts
B)   trade discounts
C)   cash discounts
D)   promotional allowances
E)   trade-in allowancesF) B) and E)
G) C) and E)

Question 7

Calculate a firm's profit using the following information: the unit price (P) for a product is $40; the quantity sold (Q) is 2,000; the fixed cost (FC) is $50,000; and the variable cost (VC) is $20 ,000.

Accepted Answer

A)   $10,000
B)   $50,000
C)   $110,000
D)   $150,000
E)   cannot be determined with the information providedF) A) and B)
G) C) and D)

Question 8

Amazon wanted lower retail prices for e-books to

Accepted Answer

A)   lower royalties to authors.
B)   eliminate distributors.
C)   raise prices overall for printed books.
D)   undermine its rival, Barnes & Noble.
E)   build its e-book business.F) None of the above
G) A) and B)

Question 9

A manufacturer of a portable digital HD camera is considering a skimming pricing strategy for its new product.Which of the following conditions would argue against using a skimming pricing strategy for the camera?

Accepted Answer

A)   There will be a large potential market, even if the product is sold at a high price.
B)   Technological problems still exist for competitors; their products are not equivalent.
C)   Increasing the volume sold reduces production costs substantially.
D)   Consumers perceive a strong price-quality relationship for this product.
E)   Many consumers in the target market are innovators.F) B) and C)
G) A) and E)

Question 10

The sum of the expenses of a firm that is stable and does not change with the quantity of the product that is produced and sold is referred to as

Accepted Answer

A)   fixed cost.
B)   total cost.
C)   variable cost.
D)   marginal cost.
E)   overhead cost.F) A) and E)
G) A) and D) A

Question 11

Yield management pricing is most consistent with services trying to deal with

Accepted Answer

A)   perceived risk.
B)   capacity management.
C)   cognitive dissonance.
D)   inelasticity of demand.
E)   new product strategy development.F) D) and E)
G) B) and C) B

Question 12

Yield management pricing refers to

Accepted Answer

A)   controlling the production of products based upon seasonal demand.
B)   deliberately selling a product below its customary price, not to increase sales, but to attract customers' attention in hopes that they will buy other products as well.
C)   charging the same prices during different times of the day or days of the week to reflect variations in supply for the service.
D)   offering significant price discounts to wholesalers that agree to purchase products in advance for a period of a year or more at a time.
E)   charging different prices to maximize revenue for a set amount of capacity at any given time.F) All of the above
G) B) and C)

Question 13

Marketers using a dynamic price policy should take care to avoid

Accepted Answer

A)   requests for allowances.
B)   price discrimination.
C)   contradictory promotions.
D)   changes in market segmentation.
E)   support from government agencies.F) C) and E)
G) C) and D)

Question 14

Variable cost refers to

Accepted Answer

A)   the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold.
B)   the sum of the expenses of the firm that change with the quantity of a product that is produced and sold.
C)   the total expense incurred by a firm in producing and marketing a product, which equals the sum of fixed cost and marginal cost.
D)   the average amount of money received for selling one unit of a product or simply the price of that unit.
E)   the change in total cost that results from producing and marketing one additional unit of a product.F) C) and D)
G) B) and E)

Question 15

All of the following statements about standard markup pricing are true except which?

Accepted Answer

A)   High-volume products usually have smaller markups than do low-volume products.
B)   The percentage markup depends on the type of retail store and the product involved.
C)   Markups must cover all expenses of the store, pay for overhead costs, and contribute something to profits.
D)   The method involves summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price.
E)   Supermarket managers use this method since they have such a large number of products that estimating the demand for each product as a means of setting price is impossible.F) A) and B)
G) A) and D)

Question 16

The quantity at which total revenue and total cost are equal is referred to as

Accepted Answer

A)   the tipping point.
B)   the profitability point.
C)   incremental return on investment.
D)   the break-even point.
E)   sustainability.F) D) and E)
G) A) and B)

Question 17

What pricing method is often used because of the difficulty in establishing a benchmark of sales or investment to show how much of a firm's effort is needed to achieve the target?

Accepted Answer

A)   target return-on-investment pricing
B)   target return-on-sales pricing
C)   standard markup pricing
D)   target pricing
E)   loss-leader pricingF) A) and B)
G) A) and E)

Question 18

Skimming pricing is considered to be a __________ approach to pricing.

Accepted Answer

A)   demand-oriented
B)   cost-oriented
C)   profit-oriented
D)   competition-oriented
E)   service-orientedF) C) and D)
G) None of the above

Question 19

Deceptive pricing practices are outlawed by legislation and enforced by which federal agency?

Accepted Answer

A)   Consumer Protection Agency
B)   U.S. Department of Justice
C)   Federal Communications Commission
D)   U.S. Department of Commerce
E)   Federal Trade CommissionF) A) and C)
G) A) and B) E

Question 20

Seasonal discounts are used by manufacturers to

Accepted Answer

A)   get rid of dated merchandise.
B)   prevent retailers from purchasing competitors' products.
C)   prolong the peak seasonal selling season.
D)   establish an immediate feeling of goodwill between the buyer and seller that hopefully will continue when prices return to normal.
E)   entice dealers to purchase seasonal merchandise earlier in the selling season.F) B) and C)
G) C) and D)

Exam 11: Pricing Products and Services

Which of the following statements about penetration pricing is most accurate?

Correct Answer
verified

Correct Answer
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Creative marketers engage in value-pricing,which is the practice of simultaneously __________ while maintaining or decreasing price.

Correct Answer
verified

Figure 11-2 -Figure 11-2 represents the four approaches to selecting an appropriate price level.Box B includes standard markup and cost-plus so it represents which approach?

Correct Answer
verified

Bundle pricing is considered to be a __________ pricing practice.

Correct Answer
verified

What type of discount to resellers is based in part on where they are in the channel?

Correct Answer
verified

Calculate a firm's profit using the following information: the unit price (P) for a product is $40; the quantity sold (Q) is 2,000; the fixed cost (FC) is $50,000; and the variable cost (VC) is $20 ,000.

Correct Answer
verified

Amazon wanted lower retail prices for e-books to

Correct Answer
verified

A manufacturer of a portable digital HD camera is considering a skimming pricing strategy for its new product.Which of the following conditions would argue against using a skimming pricing strategy for the camera?

Correct Answer
verified

The sum of the expenses of a firm that is stable and does not change with the quantity of the product that is produced and sold is referred to as

Correct Answer
verified
A

Yield management pricing is most consistent with services trying to deal with

Correct Answer
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B

Yield management pricing refers to

Correct Answer
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Marketers using a dynamic price policy should take care to avoid

Correct Answer
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Variable cost refers to

Correct Answer
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All of the following statements about standard markup pricing are true except which?

Correct Answer
verified

The quantity at which total revenue and total cost are equal is referred to as

Correct Answer
verified

What pricing method is often used because of the difficulty in establishing a benchmark of sales or investment to show how much of a firm's effort is needed to achieve the target?

Correct Answer
verified

Skimming pricing is considered to be a __________ approach to pricing.

Correct Answer
verified

Deceptive pricing practices are outlawed by legislation and enforced by which federal agency?

Correct Answer
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E

Seasonal discounts are used by manufacturers to

Correct Answer
verified

Exam 11: Pricing Products and Services

Which of the following statements about penetration pricing is most accurate?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Creative marketers engage in value-pricing,which is the practice of simultaneously __________ while maintaining or decreasing price.

Correct AnswerverifiedShow Answer

Figure 11-2 -Figure 11-2 represents the four approaches to selecting an appropriate price level.Box B includes standard markup and cost-plus so it represents which approach?

Correct AnswerverifiedShow Answer

Bundle pricing is considered to be a __________ pricing practice.

Correct AnswerverifiedShow Answer

What type of discount to resellers is based in part on where they are in the channel?

Correct AnswerverifiedShow Answer

Calculate a firm's profit using the following information: the unit price (P) for a product is $40; the quantity sold (Q) is 2,000; the fixed cost (FC) is $50,000; and the variable cost (VC) is $20 ,000.

Correct AnswerverifiedShow Answer

Amazon wanted lower retail prices for e-books to

Correct AnswerverifiedShow Answer

A manufacturer of a portable digital HD camera is considering a skimming pricing strategy for its new product.Which of the following conditions would argue against using a skimming pricing strategy for the camera?

Correct AnswerverifiedShow Answer

The sum of the expenses of a firm that is stable and does not change with the quantity of the product that is produced and sold is referred to as

Correct AnswerverifiedA

Yield management pricing is most consistent with services trying to deal with

Correct AnswerverifiedB

Yield management pricing refers to

Correct AnswerverifiedShow Answer

Marketers using a dynamic price policy should take care to avoid

Correct AnswerverifiedShow Answer

Variable cost refers to

Correct AnswerverifiedShow Answer

All of the following statements about standard markup pricing are true except which?

Correct AnswerverifiedShow Answer

The quantity at which total revenue and total cost are equal is referred to as

Correct AnswerverifiedShow Answer

What pricing method is often used because of the difficulty in establishing a benchmark of sales or investment to show how much of a firm's effort is needed to achieve the target?

Correct AnswerverifiedShow Answer

Skimming pricing is considered to be a __________ approach to pricing.

Correct AnswerverifiedShow Answer

Deceptive pricing practices are outlawed by legislation and enforced by which federal agency?

Correct AnswerverifiedE

Seasonal discounts are used by manufacturers to

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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A

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B

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E

Correct Answer
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