Question 1

Geographical adjustments are made by manufacturers or even wholesalers to list or quoted prices to reflect

Accepted Answer

A)  loyalty to the local economy whether it be city, state, or nationally designated.
B)  the cost of transportation of the products from seller to buyer.
C)  changes in price due to tariffs or excise taxes.
D)  the differentiated aspect of the particular product or service.
E)  simplicity in pricing structures.F) A) and D)
G) C) and D)

Question 2

Which of the following statements, regarding new car purchases in the United States, is most accurate?

Accepted Answer

A)  While men of all races pay basically the same price, women regardless of race pay considerably more.
B)  Seventy-nine percent of all men purchasing cars cite haggling over price as the most exciting aspects of the purchase.
C)  Car dealers offer African-Americans, women, and Hispanics higher prices than the typical purchaser.
D)  Flexible pricing will soon become illegal in the auto industry unless clear objective criteria are stated in the pricing policy.
E)  Female automobile salespeople rarely if ever offer flexible pricing.F) A) and E)
G) A) and D)

Question 3

A conspiracy among firms to set prices for a product is referred to as

Accepted Answer

A)  price discrimination.
B)  price fixing.
C)  predatory pricing.
D)  tying arrangements.
E)  exclusive dealing.F) D) and E)
G) None of the above

Question 4

_________.

Accepted Answer

A)  range-line pricing
B)  deceptive pricing
C)  manufacturer managed accounts
D)  regional rollbacks
E)  delayed payment penaltiesF) A) and D)
G) All of the above

Question 5

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)  penetration pricing
E)  loss-leader pricingF) D) and E)
G) A) and E)

Question 6

The ratio of the firm's sales revenues or unit sales to those of the industry (competitors plus the firm itself)  is referred to as

Accepted Answer

A)  target return.
B)  marginal profit.
C)  unit volume.
D)  market share.
E)  profit.F) None of the above
G) C) and E)

Question 7

Manufacturers use seasonal discounts 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) A) and B)
G) A) and E)

Question 8

A skimming pricing policy is likely to be most effective when

Accepted Answer

A)  consumers perceive your product to be similar to other products on the market.
B)  a lower price will have a major effect on reducing unit costs.
C)  competitors will be attracted to the market due to the potential for high sales revenues.
D)  consumers tend to be price sensitive.
E)  a high initial price will not attract competitors.F) A) and E)
G) None of the above

Question 9

Loss-leader pricing refers to

Accepted Answer

A)  a pricing method where the price the seller is required to inform consumers of any potential future charges.
B)  setting a low initial price and gradually but consistently increasing that price so as not to antagonize the consumer.
C)  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.
D)  a method of pricing oriented on a product's tradition, standardized channel of distribution, or other competitive factors.
E)  pricing at a slightly higher rate than necessary then banking extra revenue to mitigate any future losses that might arise as the result of internal or external environmental forces.F) C) and D)
G) A) and B)

Question 10

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, is referred to as

Accepted Answer

A)  bundle pricing.
B)  magnet pricing.
C)  loss-leader pricing.
D)  predatory pricing.
E)  bait and switch.F) B) and D)
G) All of the above

Question 11

Bundle pricing is considered to be a __________ pricing practice.

Accepted Answer

A)  demand oriented
B)  cost oriented
C)  profit oriented
D)  competition oriented
E)  multi-brand orientedF) B) and D)
G) C) and D)

Question 12

Three different objectives relate to a firm's profit, which is often measured in terms of return on investment.These objectives have different implications for pricing strategy.The three objectives include a target return, managing for long-run profits, and __________.

Accepted Answer

A)  break-even recovery
B)  profit reinvestment
C)  profit redistribution
D)  target equalization
E)  maximizing current profit objectivesF) D) and E)
G) A) and C)

Question 13

FIGURE 12-5 
-Figure 12-5 above shows that when the price moves from $2.00 to $1.50 per unit, the quantity demanded

Accepted Answer

A)  increases from 3.0 to 4.5 million units per year.
B)  decreases from 4.5 to 3.0 million units per year.
C)  increases from 3.0 to 7.5 million units per year.
D)  decreases from 7.5 to 3.0 million units per year.
E)  stays the same.F) B) and C)
G) A) and C)

Question 14

You are president of a manufacturer of small electronic appliances.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) C) and D)

Question 15

A graphic presentation of the break-even analysis that shows when total revenue and total cost intersect to identify profit or loss for a given quantity sold is referred to as a(n)  _________.

Accepted Answer

A)  Gantt chart
B)  demand curve
C)  ROI analysis
D)  cross-tabulation
E)  break-even chartF) A) and E)
G) B) and D)

Question 16

What are three special adjustments to list or quoted price?

Accepted Answer

Three special adjustments to l...

Question 17

You have been asked to calculate the break-even point for a new line of souvenir tee-shirts.The selling price will be $25 per shirt.The labor costs will be $5 per shirt.The administrative costs of operating the company are estimated to be $60,000 annually and the sales and marketing expenses are $20,000 a year.Additionally, the cost of materials will be $10 per shirt.What is the break-even quantity?

Accepted Answer

A)  1,715 shirts
B)  2,286 shirts
C)  3,000 shirts
D)  4,000 shirts
E)  8,000 shirtsF) A) and E)
G) D) and E)

Question 18

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)  adding a fixed percentage to the cost of all items in a specific product class.
D)  setting prices to achieve a profit that is a specified percentage of the sales volume.
E)  increasing the price slightly to protect against undue profit losses from unforeseen environmental factors.F) None of the above
G) B) and E)

Question 19

Rather than emphasize demand, cost, or profit factors, a price setter can stress what competitors or _________ is doing.

Accepted Answer

A)  the service sector
B)  the economy
C)  the global market
D)  "the market"
E)  the stock marketF) C) and E)
G) D) and E)

Question 20

Barter refers to

Accepted Answer

A)  a reciprocity agreement stipulating that if company "A" purchase services from company "B," then company "B" must purchase similar services from company "A."
B)  a tying agreement stipulating that if company "A" purchases a product from company "B," they must also purchase its services.
C)  the practice of exchanging products and services for other products and services rather than for money.
D)  the practice of exchanging services for products of equal or greater value.
E)  the practice of exchanging products and services for other services rather than for money.F) None of the above
G) A) and C)

Exam 12: Pricing Products and Services

Loss-leader pricing refers to

Correct Answer
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FIGURE 12-5 -Figure 12-5 above shows that when the price moves from $2.00 to $1.50 per unit, the quantity demanded

Correct Answer
verified

The ratio of the firm's sales revenues or unit sales to those of the industry (competitors plus the firm itself) is referred to as

Correct Answer
verified

Geographical adjustments are made by manufacturers or even wholesalers to list or quoted prices to reflect

Correct Answer
verified

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, is referred to as

Correct Answer
verified

A graphic presentation of the break-even analysis that shows when total revenue and total cost intersect to identify profit or loss for a given quantity sold is referred to as a(n) _________.

Correct Answer
verified

Bundle pricing is considered to be a __________ pricing practice.

Correct Answer
verified

Which of the following statements, regarding new car purchases in the United States, is most accurate?

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

What are three special adjustments to list or quoted price?

Correct Answer
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Three special adjustments to l...
View Answer

Correct Answer
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Manufacturers use seasonal discounts to

Correct Answer
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Barter refers to

Correct Answer
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Standard markup pricing refers to

Correct Answer
verified

You are president of a manufacturer of small electronic appliances.You want to reduce your break-even quantity.All things being equal, you can do this by

Correct Answer
verified

Three different objectives relate to a firm's profit, which is often measured in terms of return on investment.These objectives have different implications for pricing strategy.The three objectives include a target return, managing for long-run profits, and __________.

Correct Answer
verified

Rather than emphasize demand, cost, or profit factors, a price setter can stress what competitors or _________ is doing.

Correct Answer
verified

A skimming pricing policy is likely to be most effective when

Correct Answer
verified

A conspiracy among firms to set prices for a product is referred to as

Correct Answer
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_________.

Correct Answer
verified

Exam 12: Pricing Products and Services

Loss-leader pricing refers to

Correct AnswerverifiedShow Answer

FIGURE 12-5 -Figure 12-5 above shows that when the price moves from $2.00 to $1.50 per unit, the quantity demanded

Correct AnswerverifiedShow Answer

The ratio of the firm's sales revenues or unit sales to those of the industry (competitors plus the firm itself) is referred to as

Correct AnswerverifiedShow Answer

Geographical adjustments are made by manufacturers or even wholesalers to list or quoted prices to reflect

Correct AnswerverifiedShow Answer

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, is referred to as

Correct AnswerverifiedShow Answer

A graphic presentation of the break-even analysis that shows when total revenue and total cost intersect to identify profit or loss for a given quantity sold is referred to as a(n) _________.

Correct AnswerverifiedShow Answer

Bundle pricing is considered to be a __________ pricing practice.

Correct AnswerverifiedShow Answer

Which of the following statements, regarding new car purchases in the United States, is most accurate?

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

What are three special adjustments to list or quoted price?

Correct AnswerverifiedThree special adjustments to l...View AnswerShow Answer

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Manufacturers use seasonal discounts to

Correct AnswerverifiedShow Answer

Barter refers to

Correct AnswerverifiedShow Answer

Standard markup pricing refers to

Correct AnswerverifiedShow Answer

You are president of a manufacturer of small electronic appliances.You want to reduce your break-even quantity.All things being equal, you can do this by

Correct AnswerverifiedShow Answer

Three different objectives relate to a firm's profit, which is often measured in terms of return on investment.These objectives have different implications for pricing strategy.The three objectives include a target return, managing for long-run profits, and __________.

Correct AnswerverifiedShow Answer

Rather than emphasize demand, cost, or profit factors, a price setter can stress what competitors or _________ is doing.

Correct AnswerverifiedShow Answer

A skimming pricing policy is likely to be most effective when

Correct AnswerverifiedShow Answer

A conspiracy among firms to set prices for a product is referred to as

Correct AnswerverifiedShow Answer

_________.

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