Question 1

Target pricing refers to

Accepted Answer

A)  a method of selecting specific prices wholesalers and retailers are willing to pay oriented upon the elasticity of each given item.
B)  a method of charging different prices to maximize revenue for a set amount of capacity at any given time.
C)  the practice of simultaneously increasing product and service benefits while maintaining or decreasing price.
D)  method of (1)  estimating the price that ultimate consumers would be willing to pay for a product, (2)  working backward through markups taken by retailers and wholesalers to determine what price to charge wholesalers, and (3)  deliberately adjusting the composition and features of the product to achieve the target price.
E)  method of estimating the price that ultimate consumers would be willing to pay for a product, determining how much wholesalers wish to charge its customers, and the deliberately adjusting the composition and features of the product to achieve the target price to consumers.F) B) and E)
G) A) and B)

Question 2

The __________ of a product is what customers are generally willing to pay.

Accepted Answer

A)  customary price
B)  market price
C)  asking price
D)  reduced price
E)  target priceF) A) and C)
G) A) and E)

Question 3

A box of 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 E)
G) A) and B)

Question 4

Airlines, hotels, and car rental firms engage in _________ by varying prices based on time, day, week, or season to match demand and supply.

Accepted Answer

A)  skimming pricing
B)  yield management pricing
C)  bundle pricing
D)  target pricing
E)  prestige pricingF) A) and D)
G) C) and D)

Question 5

Demand curve refers to a graph

Accepted Answer

A)  relating the quantity sold and price, which shows the maximum number of units that will be sold at a given price.
B)  relating the quantity sold and price, which shows the minimum number of units that must be sold to break even.
C)  relating the quantity sold and price, which shows the minimum number of units that must be sold in order to make a profit.
D)  relating total production costs to various price points in order to determine how many units must be sold in order to realize a predetermined profit.
E)  relating total product costs to advertising expenditures in order to determine how to spend the least amount of money while creating the greatest customer demand.F) A) and B)
G) None of the above

Question 6

Which of the following companies would be most likely to use target return-on-investment pricing?

Accepted Answer

A)  a farmer
B)  a florist shop
C)  a craftsperson book publisher
D)  a veterinarian
E)  an automobile manufacturerF) B) and E)
G) C) and D)

Question 7

FIGURE 12-4 
-Position "C" in Figure 12-4 above represents the price premium of which of the following?

Accepted Answer

A)  Crunch 'n Munch
B)  Cracker Jack
C)  Fiddle Faddle
D)  Private Brands
E)  Seasonal, specialty, and regional brandsF) C) and E)
G) B) and D)

Question 8

Three different objectives relate to a firm's profit, which is often measured in terms of return on investment.One objective, known as _________, is common in many firms because the targets can be set and performance measured quickly.

Accepted Answer

A)  maximizing current profit
B)  target return
C)  maximizing risk
D)  breakeven strategy
E)  managing for long-run profitsF) B) and D)
G) A) and C)

Question 9

A primary reason for Washburn's success is

Accepted Answer

A)  underselling competitors by mass producing fine quality guitars.
B)  developing product lines at different price points for different market segments.
C)  offering significant price breaks to well-known performers in exchange for product endorsements.
D)  selling traditional American "rock n' roll" guitars to in global markets.
E)  setting up free music programs and donating low price-point guitars to students in schools that have lost their music programs due to budget constraints.F) B) and E)
G) C) and D)

Question 10

Which of the following would be an example of a fixed cost for a company that makes carbon monoxide monitoring systems for employees to wear that work in hazardous areas?

Accepted Answer

A)  the lithium batteries that are used in each monitor
B)  the chest harness which the employee must use to wear the monitor
C)  the rent for the company's offices
D)  the free training videos that are sent to each new customer
E)  the stainless steel, water-resistant cases in which the monitors sitF) B) and E)
G) C) and D)

Question 11

Movement along the demand curve is illustrated by which of the following?

Accepted Answer

A)  Prices remain the same, but there is a significant increase in demand.
B)  Prices remain the same, but there is a significant decrease in demand.
C)  As the price is raised, the quantity demanded increases, assuming all else stays the same.
D)  As the price is lowered, the quantity demanded increases, assuming all else stays the same.
E)  Movement along the curve rather than a shift of the curve indicates that some significant event has taken place outside the organization that has affected demand.F) A) and D)
G) A) and C)

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, maximizing current profit objectives, and _________.

Accepted Answer

A)  break-even recovery
B)  profit reinvestment
C)  profit redistribution
D)  target equalization
E)  managing for long-run profitsF) B) and E)
G) A) and D)

Question 13

The use of "special fees" and "surcharges" is driven by consumers' zeal for low prices and _________.

Accepted Answer

A)  anonymity that is provide by Internet sales
B)  the idea of getting "more" for their money
C)  a dislike of haggling or negotiating
D)  the need for extra accessories
E)  the ease of making price comparisons on the InternetF) C) and E)
G) All of the above

Question 14

What factors determine price elasticity of demand?

Accepted Answer

Price elasticity of demand is determined...

Question 15

How sensitive consumer demand and the firm's revenues are to changes in the product's price is called

Accepted Answer

A)  margin of error.
B)  marginal revenue.
C)  price elasticity of demand.
D)  demand shift.
E)  average demand.F) B) and E)
G) A) and B)

Question 16

The prices for all furniture sold at American Furniture Warehouse end in $9, such as $599, $899, etc.American Furniture Warehouse uses

Accepted Answer

A)  odd-even pricing.
B)  dynamic pricing.
C)  price lining.
D)  bundle pricing.
E)  unitary pricing.F) B) and C)
G) B) and D)

Question 17

Penetration pricing is intended to appeal to which market?

Accepted Answer

A)  highly selective quality-seeking consumers
B)  price-insensitive markets
C)  the mass market
D)  specialty goods markets
E)  the same markets as skimming pricingF) A) and C)
G) B) and C)

Question 18

Price discrimination is illegal under the

Accepted Answer

A)  Robinson-Patman Act.
B)  Consumer Goods Pricing Act.
C)  Federal Trade Commission Act.
D)  North American Free Trade Act.
E)  Fair Pricing ActF) A) and C)
G) C) and D)

Question 19

In the cash discount $500 4/10 net 30, the number 4 refers to

Accepted Answer

A)  the percentage markup on the original unit.
B)  the percentage discounted if the bill is paid within 10 days.
C)  the percentage increase in price if the bill is not paid within 10days.
D)  the discount in dollars per unit awarded if the order is paid on time.
E)  the penalty in dollars if the bill is not paid within 10days.F) B) and C)
G) B) and E)

Question 20

Which of the following statements about demand as a pricing constraint is most accurate?

Accepted Answer

A)  The number of potential buyers for the product class has little effect on the price a seller can charge.
B)  The number of potential buyers for the product affects the price a seller can charge but only if the product is a luxury item.
C)  The number of potential buyers for the product affects the price a seller can charge but only if the product is a necessity item.
D)  The number of potential buyers for the brand affects the price a seller can charge in the growth stage of a product life cycle, but not in the introductory stage.
E)  Whether the item is a luxury or a necessity affects the price a seller can charge.F) C) and D)
G) A) and E)

Exam 12: Pricing Products and Services

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, maximizing current profit objectives, and _________.

Correct AnswerverifiedShow Answer

A primary reason for Washburn's success is

Correct AnswerverifiedShow Answer

Which of the following would be an example of a fixed cost for a company that makes carbon monoxide monitoring systems for employees to wear that work in hazardous areas?

Correct AnswerverifiedShow Answer

Price discrimination is illegal under the

Correct AnswerverifiedShow Answer

Penetration pricing is intended to appeal to which market?

Correct AnswerverifiedShow Answer

A box of 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

Movement along the demand curve is illustrated by which of the following?

Correct AnswerverifiedShow Answer

Three different objectives relate to a firm's profit, which is often measured in terms of return on investment.One objective, known as _________, is common in many firms because the targets can be set and performance measured quickly.

Correct AnswerverifiedShow Answer

What factors determine price elasticity of demand?

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

Which of the following companies would be most likely to use target return-on-investment pricing?

Correct AnswerverifiedShow Answer

FIGURE 12-4 -Position "C" in Figure 12-4 above represents the price premium of which of the following?

Correct AnswerverifiedShow Answer

The prices for all furniture sold at American Furniture Warehouse end in $9, such as $599, $899, etc.American Furniture Warehouse uses

Correct AnswerverifiedShow Answer

The __________ of a product is what customers are generally willing to pay.

Correct AnswerverifiedShow Answer

Which of the following statements about demand as a pricing constraint is most accurate?

Correct AnswerverifiedShow Answer

How sensitive consumer demand and the firm's revenues are to changes in the product's price is called

Correct AnswerverifiedShow Answer

The use of "special fees" and "surcharges" is driven by consumers' zeal for low prices and _________.

Correct AnswerverifiedShow Answer

Airlines, hotels, and car rental firms engage in _________ by varying prices based on time, day, week, or season to match demand and supply.

Correct AnswerverifiedShow Answer

Demand curve refers to a graph

Correct AnswerverifiedShow Answer

In the cash discount $500 4/10 net 30, the number 4 refers to

Correct AnswerverifiedShow Answer

Target pricing refers to

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified