Question 1

All of the following are competition-oriented approaches to selecting an approximate price level EXCEPT:

Accepted Answer

A)  loss leader pricing.
B)  customary pricing.
C)  above-market pricing.
D)  skimming.
E)  at-market pricing.F) A) and C)
G) D) and E)

Question 2

The total expense incurred by a firm in producing and marketing a product,which equals the sum of fixed cost and variable cost,is referred to as

Accepted Answer

A)  overhead cost.
B)  total cost.
C)  unit cost.
D)  average cost.
E)  marginal cost.F) B) and E)
G) B) and D)

Question 3

Figure 11-2
-Figure 11-2 above represents the four approaches to selecting an appropriate price level."C" includes target profit and target return on sales so it represents which approach?

Accepted Answer

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

Question 4

Vizio's long-term goal for the next 20 to 30 years is to

Accepted Answer

A)  have at least one of its HDTV products in every single home in the United States.
B)  have its HDTVs exported from the U.S.to China.
C)  be the next Sony.
D)  be the next Apple.
E)  create the first completely wireless HDTV entertainments system.F) C) and E)
G) A) and C)

Question 5

A recently graduated business student decided to open a small Internet café serving a variety of unusual nonalcoholic beverages from around the world.He carefully used all the pricing formulas he learned in school and set a goal to break even the first six months and make a moderate profit for the next six months,at which time he would review his pricing strategies.Within a week after opening,every seat was filled and he had to replenish his beverage orders several times.At his six-month review,he was devastated to find that despite huge sales,he had actually lost money.He realized it wasn't his "math" that was wrong; he forgot to include monthly expenses such as toilet paper,paper towels,hand soap,and trash removal fees in his calculations.These costs should have appeared as __________ in his break-even analysis.

Accepted Answer

A)  fixed costs
B)  marginal costs
C)  variable costs
D)  overhead costs
E)  sunk costsF) A) and E)
G) C) and E)

Question 6

Barter refers to

Accepted Answer

A)  a reciprocity agreement stipulating that if company "A" purchases 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," it 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 money.F) B) and C)
G) B) and E)

Question 7

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) C) and D)
G) D) 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 significantly lower fixed costs.
C)  customers interpret high price as signifying high quality.
D)  consumers tend to be price sensitive.
E)  it will be easier to set measurable sales unit goals.F) B) and D)
G) A) and B)

Question 9

Demand factors refer to

Accepted Answer

A)  the number of consumers who can afford to purchase a product or service.
B)  the price that should be charged for a given product.
C)  consumers' willingness and ability to pay for goods and services.
D)  the number of consumers who want to purchase a product.
E)  the number of consumers who can purchase a product.F) A) and C)
G) B) and E)

Question 10

The practice of charging a very low price for a product with the intent of driving competitors out of business is referred to as

Accepted Answer

A)  price fixing.
B)  predatory pricing.
C)  price discrimination.
D)  deceptive pricing.
E)  geographical pricing.F) None of the above
G) C) and E)

Question 11

Architectural firms that specialize in designing and constructing one-of-a-kind custom buildings such as the Rock Hall of Fame often use which pricing strategy?

Accepted Answer

A)  cost-plus pricing
B)  experience curve pricing
C)  standard markup pricing
D)  yield management pricing
E)  price liningF) All of the above
G) B) and E)

Question 12

The break-even point (BEP) = [Fixed cost ÷ (Unit price − __________) ].

Accepted Answer

A)  Total cost
B)  Total expense
C)  Marginal revenue
D)  Unit variable cost
E)  Total number of units produced or quantityF) A) and B)
G) A) and C)

Question 13

Which of the following does not occur during a firm's selection of an approximate price level?

Accepted Answer

A)  identify pricing objectives and constraints
B)  choose a general pricing approach
C)  run break-even analysis
D)  determine cost,volume,and profit relationships
E)  make adjustments to the list priceF) C) and E)
G) A) and B)

Question 14

What factors determine price elasticity of demand?

Accepted Answer

Price elasticity of demand is determined...

Question 15

Lady Marion Seafood,Inc.sells 5-pound packages of Alaskan salmon.Assume its unit variable cost per package is $30 and its fixed cost is $250,000.It wants a target profit of $38,000 on a volume of 16,000 packages.What should the firm charge for a five-pound package of salmon?

Accepted Answer

A)  $25.00
B)  $33.94
C)  $40.00
D)  $48.00
E)  $61.25F) A) and B)
G) A) and C)

Question 16

A box of Cascade dishwasher detergent shrink-wrapped with a bottle of Jet Dry for 10 cents more than the regular price of the dishwasher detergent is an example of __________ pricing.

Accepted Answer

A)  penetration
B)  prestige
C)  bundle
D)  odd-even
E)  standard mark-upF) A) and C)
G) B) and D)

Question 17

A manufacturing company that introduces a product should consider as a pricing constraint what specific price its __________ currently charge or may charge in the future.

Accepted Answer

A)  present and potential competitors
B)  financial institutions
C)  suppliers
D)  unions
E)  regulatorsF) A) and B)
G) A) and C)

Question 18

When Hallmark cards introduced a line of 99-cent cards (about half the price of the previously least expensive cards it sold) ,the greeting card company was trying to appeal to a mass market that was price sensitive.Hallmark was using a __________ pricing strategy.

Accepted Answer

A)  prestige
B)  skimming
C)  target ROI
D)  penetration
E)  experience-curveF) C) and D)
G) B) and D)

Question 19

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) A) and B)
G) C) and E)

Question 20

Give an example of yield management pricing and explain why it is used.

Accepted Answer

Yield management pricing is charging dif...

Exam 11: Pricing Products and Services

A skimming pricing policy is likely to be most effective when

Correct Answer
verified

When Hallmark cards introduced a line of 99-cent cards (about half the price of the previously least expensive cards it sold) ,the greeting card company was trying to appeal to a mass market that was price sensitive.Hallmark was using a __________ pricing strategy.

Correct Answer
verified

A manufacturing company that introduces a product should consider as a pricing constraint what specific price its __________ currently charge or may charge in the future.

Correct Answer
verified

The total expense incurred by a firm in producing and marketing a product,which equals the sum of fixed cost and variable cost,is referred to as

Correct Answer
verified

Correct Answer
verified

A box of Cascade dishwasher detergent shrink-wrapped with a bottle of Jet Dry for 10 cents more than the regular price of the dishwasher detergent is an example of __________ pricing.

Correct Answer
verified

All of the following are competition-oriented approaches to selecting an approximate price level EXCEPT:

Correct Answer
verified

The practice of charging a very low price for a product with the intent of driving competitors out of business is referred to as

Correct Answer
verified

What factors determine price elasticity of demand?

Correct Answer
verified
Price elasticity of demand is determined...
View Answer

Demand factors refer to

Correct Answer
verified

Which of the following does not occur during a firm's selection of an approximate price level?

Correct Answer
verified

Lady Marion Seafood,Inc.sells 5-pound packages of Alaskan salmon.Assume its unit variable cost per package is $30 and its fixed cost is $250,000.It wants a target profit of $38,000 on a volume of 16,000 packages.What should the firm charge for a five-pound package of salmon?

Correct Answer
verified

The break-even point (BEP) = [Fixed cost ÷ (Unit price − __________) ].

Correct Answer
verified

Figure 11-2 -Figure 11-2 above represents the four approaches to selecting an appropriate price level."C" includes target profit and target return on sales so it represents which approach?

Correct Answer
verified

Marketing executives must translate estimates of customer demand into estimates of

Correct Answer
verified

Vizio's long-term goal for the next 20 to 30 years is to

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

Barter refers to

Correct Answer
verified

Architectural firms that specialize in designing and constructing one-of-a-kind custom buildings such as the Rock Hall of Fame often use which pricing strategy?

Correct Answer
verified

Give an example of yield management pricing and explain why it is used.

Correct Answer
verified
Yield management pricing is charging dif...
View Answer

Exam 11: Pricing Products and Services

A skimming pricing policy is likely to be most effective when

Correct AnswerverifiedShow Answer

When Hallmark cards introduced a line of 99-cent cards (about half the price of the previously least expensive cards it sold) ,the greeting card company was trying to appeal to a mass market that was price sensitive.Hallmark was using a __________ pricing strategy.

Correct AnswerverifiedShow Answer

A manufacturing company that introduces a product should consider as a pricing constraint what specific price its __________ currently charge or may charge in the future.

Correct AnswerverifiedShow Answer

The total expense incurred by a firm in producing and marketing a product,which equals the sum of fixed cost and variable cost,is referred to as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A box of Cascade dishwasher detergent shrink-wrapped with a bottle of Jet Dry for 10 cents more than the regular price of the dishwasher detergent is an example of __________ pricing.

Correct AnswerverifiedShow Answer

All of the following are competition-oriented approaches to selecting an approximate price level EXCEPT:

Correct AnswerverifiedShow Answer

The practice of charging a very low price for a product with the intent of driving competitors out of business is referred to as

Correct AnswerverifiedShow Answer

What factors determine price elasticity of demand?

Correct AnswerverifiedPrice elasticity of demand is determined...View AnswerShow Answer

Demand factors refer to

Correct AnswerverifiedShow Answer

Which of the following does not occur during a firm's selection of an approximate price level?

Correct AnswerverifiedShow Answer

Lady Marion Seafood,Inc.sells 5-pound packages of Alaskan salmon.Assume its unit variable cost per package is $30 and its fixed cost is $250,000.It wants a target profit of $38,000 on a volume of 16,000 packages.What should the firm charge for a five-pound package of salmon?

Correct AnswerverifiedShow Answer

The break-even point (BEP) = [Fixed cost ÷ (Unit price − __________) ].

Correct AnswerverifiedShow Answer

Figure 11-2 -Figure 11-2 above represents the four approaches to selecting an appropriate price level."C" includes target profit and target return on sales so it represents which approach?

Correct AnswerverifiedShow Answer

Marketing executives must translate estimates of customer demand into estimates of

Correct AnswerverifiedShow Answer

Vizio's long-term goal for the next 20 to 30 years is to

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

Barter refers to

Correct AnswerverifiedShow Answer

Architectural firms that specialize in designing and constructing one-of-a-kind custom buildings such as the Rock Hall of Fame often use which pricing strategy?

Correct AnswerverifiedShow Answer

Give an example of yield management pricing and explain why it is used.

Correct AnswerverifiedYield management pricing is charging dif...View AnswerShow Answer

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verified
Price elasticity of demand is determined...
View Answer

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Correct Answer
verified
Yield management pricing is charging dif...
View Answer