Question 1

When Pizza Hut announced it was going to add 25 percent more toppings to its Meat Lover's line of pizzas without increasing prices,consumers benefitted from an increase in what?

Accepted Answer

A)   cost
B)   appearance
C)   value
D)   price
E)   qualityF) B) and C)
G) A) and E)

Question 2

The purpose of a cash discount is to

Accepted Answer

A)   reward retailers for making large quantity purchases.
B)   encourage purchasing items during periods of low demand.
C)   prevent competitors from obtaining shelf space.
D)   counteract the introduction of a new product by a competitor.
E)   encourage retailers to pay their bills promptly.F) A) and B)
G) None of the above

Question 3

When Amazon introduced the Kindle Fire tablet device at $199 while Apple was selling the lowest price iPad for $499,Amazon was using a __________ pricing strategy.

Accepted Answer

A)   skimming
B)   price lining
C)   BOGO
D)   penetration
E)   loss-leaderF) None of the above
G) A) and D)

Question 4

Marketing executives must translate estimates of customer demand into estimates of

Accepted Answer

A)   personnel.
B)   advertising expenditures.
C)   ancillary product support.
D)   revenues the firm expects to receive.
E)   supply.F) C) and E)
G) B) and E)

Question 5

Standard markup pricing refers to

Accepted Answer

A)   adjusting the price of a product so it is "in line" with that of its largest competitor.
B)   setting the price of a line of products at a number of different price points.
C)   setting prices to achieve a profit that is a specified percentage of the sales volume.
D)   increasing the price slightly to protect against undue profit losses from unforeseen environmental forces.
E)   adding a fixed percentage to the cost of all items in a specific product class.F) A) and B)
G) B) and D)

Question 6

Which of these is true about a pair of $200 designer denim jeans?

Accepted Answer

A)   The manufacturer's labor to make them comprises the largest percentage of the final price, with other channel members clamoring over a mere 10 percent.
B)   Everyone gets a fair cut of the final price; the marketer will be cut off from the customer unless all channel members are profitable.
C)   The specialty retailers that sell them account for only 25 percent of the cost so that the jeans can benefit from demand pull.
D)   The contract manufacturer for the jeans receives the least percentage of the final price.
E)   The marketer of the designer denim jeans typically is not profitable for products like these.F) B) and C)
G) None of the above

Question 7

Skimming pricing refers to

Accepted Answer

A)   setting the lowest initial price possible when introducing a new or innovative product in order to "skim" sales from competitors.
B)   setting the highest initial price that customers who really desire the product are willing to pay.
C)   setting a low initial price on a new product to appeal immediately to the mass market.
D)   the practice of replacing promotional allowances with higher manufacturer list prices.
E)   setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it.F) D) and E)
G) A) and E)

Question 8

What is critical when using target profit pricing?

Accepted Answer

A)   demand that is insensitive to price over the range being considered
B)   a higher-than average price compared to competitors
C)   a low potential for currency exchange rates to change
D)   a lower-than average price compared to competitors
E)   a new or innovative productF) B) and D)
G) C) and D)

Question 9

A promotional allowance is

Accepted Answer

A)   a onetime discount to promote the product that must be used within a certain time frame.
B)   the cash payments or an extra amount of free goods awarded sellers in the marketing channel for undertaking certain advertising or selling activities to promote the product.
C)   the return of money to promote the product based on proof of purchase.
D)   a short-term price reduction when consumer demand takes a significant and unexpected dip.
E)   an incentive, such as trips, cruises, jewelry, etc., presented to brand-loyal customers.F) A) and C)
G) C) and E)

Question 10

Penetration pricing refers to

Accepted Answer

A)   charging different prices to different buyers for goods of like grade and quality.
B)   setting the highest initial price that customers really desiring the product are willing to pay.
C)   setting a low initial price on a new product to appeal immediately to the mass market.
D)   setting a market price for a product or product class based on a subjective feel for the competitors' prices or market price.
E)   setting prices a few dollars or cents under an even number.F) B) and C)
G) A) and C)

Question 11

Recently,much of the western United States experienced a drought condition and water usage was restricted in Denver.Yet,even though most people used less water,the price of water did not drop.When the drought was declared over,the water company raised water prices.However,the residents of Denver did not use less water.Here,water is

Accepted Answer

A)   price elastic.
B)   price sensitive.
C)   price inelastic.
D)   price insensitive.
E)   unitary elastic.F) D) and E)
G) None of the above

Question 12

The newer a product and the earlier it is in its life cycle,

Accepted Answer

A)   the lower the price the firm must charge.
B)   the more competition it has.
C)   the higher is the price that can usually be charged.
D)   the lower its production costs are.
E)   the lower its unit variable cost is.F) A) and B)
G) A) and C)

Question 13

Many cosmetology schools allow their advanced students to style hair for "real-world" clients for a reduced fee.The students benefit from the experience,the clients get a less expensive haircut,and the school is able to provide students with additional training without costing it anything; in fact,they even profit from it.This is an example of

Accepted Answer

A)   value-pricing.
B)   societal pricing.
C)   revenue sharing.
D)   barter.
E)   cost-assist pricing.F) B) and D)
G) B) and E)

Question 14

Which of the following is an example of a price?

Accepted Answer

A)   college tuition
B)   operating costs
C)   liquidity
D)   value
E)   stockholders' equityF) A) and B)
G) B) and C)

Question 15

Figure 11-3b 1 to D2.This most likely represents A)  an increase in demand that did not require a change in price but was the result of a change in one or more demand factors. B)  an increase in demand that required a decrease in price. C)  no change in price and a decrease in demand that results from internal business practice changes. D)  no change in demand or price but a greater profit due to economies of scale. E)  a decrease in price from $8 to $6 per unit." class="answers-bank-image d-inline" rel="preload" >
-In Figure 11-3b,the demand curve shifts from D1 to D2.This most likely represents

Accepted Answer

A)   an increase in demand that did not require a change in price but was the result of a change in one or more demand factors.
B)   an increase in demand that required a decrease in price.
C)   no change in price and a decrease in demand that results from internal business practice changes.
D)   no change in demand or price but a greater profit due to economies of scale.
E)   a decrease in price from $8 to $6 per unit.F) B) and E)
G) A) and D)

Question 16

Your local instant photocopying service charges 10 cents a copy up to 25 copies,9 cents a copy for 26 to 99 copies,and 8 cents a copy for 100 copies or more.What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

Accepted Answer

A)   experience curve pricing
B)   loss-leader pricing
C)   a quantity discount
D)   a promotional discount
E)   everyday low pricingF) B) and C)
G) C) and D)

Question 17

A critical assumption when using target profit pricing is that

Accepted Answer

A)   a higher average price will not cause the demand for a product to fall.
B)   new technology will cause the demand for a product to rise.
C)   a higher average price will deter moves by competitors.
D)   this form of pricing is extremely risky because profit is tied to the current value of the dollar.
E)   competitors will not copy any pricing changes.F) C) and E)
G) B) and C)

Question 18

Price discrimination is illegal under the

Accepted Answer

A)   Sherman Act.
B)   Consumer Goods Pricing Act.
C)   Robinson-Patman Act.
D)   Federal Trade Commission Act.
E)   Anti-Competitive Act.F) A) and B)
G) A) and C)

Question 19

Describe a profit objective used by many Japanese manufacturing firms.

Accepted Answer

Managing for long-run profits is a prici...

Question 20

The ratio of perceived benefits to price is referred to as

Accepted Answer

A)   the price-quality relationship.
B)   customer-value pricing.
C)   value-added pricing.
D)   value analysis.
E)   value.F) A) and B)
G) A) and D)

Exam 11: Pricing Products and Services

The purpose of a cash discount is to

Correct Answer
verified

A critical assumption when using target profit pricing is that

Correct Answer
verified

Describe a profit objective used by many Japanese manufacturing firms.

Correct Answer
verified
Managing for long-run profits is a prici...
View Answer

Correct Answer
verified

Your local instant photocopying service charges 10 cents a copy up to 25 copies,9 cents a copy for 26 to 99 copies,and 8 cents a copy for 100 copies or more.What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

Correct Answer
verified

Figure 11-3b -In Figure 11-3b,the demand curve shifts from D₁ to D2.This most likely represents

Correct Answer
verified

Penetration pricing refers to

Correct Answer
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Which of these is true about a pair of $200 designer denim jeans?

Correct Answer
verified

Correct Answer
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Standard markup pricing refers to

Correct Answer
verified

Marketing executives must translate estimates of customer demand into estimates of

Correct Answer
verified

Which of the following is an example of a price?

Correct Answer
verified

What is critical when using target profit pricing?

Correct Answer
verified

The newer a product and the earlier it is in its life cycle,

Correct Answer
verified

When Pizza Hut announced it was going to add 25 percent more toppings to its Meat Lover's line of pizzas without increasing prices,consumers benefitted from an increase in what?

Correct Answer
verified

Skimming pricing refers to

Correct Answer
verified

A promotional allowance is

Correct Answer
verified

The ratio of perceived benefits to price is referred to as

Correct Answer
verified

Price discrimination is illegal under the

Correct Answer
verified

When Amazon introduced the Kindle Fire tablet device at $199 while Apple was selling the lowest price iPad for $499,Amazon was using a __________ pricing strategy.

Correct Answer
verified

Exam 11: Pricing Products and Services

The purpose of a cash discount is to

Correct AnswerverifiedShow Answer

A critical assumption when using target profit pricing is that

Correct AnswerverifiedShow Answer

Describe a profit objective used by many Japanese manufacturing firms.

Correct AnswerverifiedManaging for long-run profits is a prici...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Your local instant photocopying service charges 10 cents a copy up to 25 copies,9 cents a copy for 26 to 99 copies,and 8 cents a copy for 100 copies or more.What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

Correct AnswerverifiedShow Answer

Figure 11-3b -In Figure 11-3b,the demand curve shifts from D1 to D2.This most likely represents

Correct AnswerverifiedShow Answer

Penetration pricing refers to

Correct AnswerverifiedShow Answer

Which of these is true about a pair of $200 designer denim jeans?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Standard markup pricing refers to

Correct AnswerverifiedShow Answer

Marketing executives must translate estimates of customer demand into estimates of

Correct AnswerverifiedShow Answer

Which of the following is an example of a price?

Correct AnswerverifiedShow Answer

What is critical when using target profit pricing?

Correct AnswerverifiedShow Answer

The newer a product and the earlier it is in its life cycle,

Correct AnswerverifiedShow Answer

When Pizza Hut announced it was going to add 25 percent more toppings to its Meat Lover's line of pizzas without increasing prices,consumers benefitted from an increase in what?

Correct AnswerverifiedShow Answer

Skimming pricing refers to

Correct AnswerverifiedShow Answer

A promotional allowance is

Correct AnswerverifiedShow Answer

The ratio of perceived benefits to price is referred to as

Correct AnswerverifiedShow Answer

Price discrimination is illegal under the

Correct AnswerverifiedShow Answer

When Amazon introduced the Kindle Fire tablet device at $199 while Apple was selling the lowest price iPad for $499,Amazon was using a __________ pricing strategy.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
verified
Managing for long-run profits is a prici...
View Answer

Correct Answer
verified

Correct Answer
verified

Figure 11-3b -In Figure 11-3b,the demand curve shifts from D₁ to D2.This most likely represents

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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