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Exam 15: Pricing of Services

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Question 21

Multiple Choice

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Price framing would be used when the customer defines value as:

A) All that I get for all that I give
B) Superior quality
C) Quality I get for the price I pay
D) Everything I want in a service
E) Low price

F) A) and C)
G) C) and D)

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Question 22

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The basic formula for _____ is Price = Direct costs + Overhead + Profit margin.

A) Contribution margin
B) Return on investment
C) Cost-based pricing
D) ABC costing
E) Net profit

F) None of the above
G) C) and E)

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Question 23

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The New York Yankees,a major league baseball team,offers half-price tickets for high school and college students every Wednesday home game at Yankee Stadium.The New York Yankees are using a(n) _____ pricing strategy.

Deana and Rod Li went on a one-week vacation at the Club Med Turkoise village,located in Turks and Caicos,a chain of islands in the Caribbean.Club Med's per person price of $2199 included round-trip air travel from New York,one-week accommodations,all meals,sports,activities and nightly entertainment.Club Med is using a _____ strategy.

Which of the following is NOT a type of differential used by service providers to synchronize demand and supply?

Accountants,architects,interior decorators,marriage counselors and lawyers typically use a _____ pricing strategy.

Which of the following statements describes a problem in cost-based pricing for services?

Because most people like to get tattoos and body piercings on the weekends,a tattoo parlor in Portland,Maine,offers a reduced rate from Monday to Thursday for all of its services.Prices on Friday and Saturday are 45 percent higher than they are during the rest of the week.The tattoo parlor is using a(n) _____ pricing strategy.

Which of the following statements describes a problem with demand-based pricing for services?

A prestige pricing strategy is appropriate when customers define value as:

The price for an all-day trip to the Alpine Spa is $235 and includes an hour-long massage,a facial,a manicure and pedicure and a hair styling and make-up application.Any of these services can be purchased individually for the total cost of almost $350.What kind of pricing strategy is Alpine Spa using?

Which of the following approaches to pricing considers that customers may judge quality on the basis of price?

In which of the following service industries would you most likely find the service provider using competition-based pricing?

When the customer defines value as low price,the service provider should use prestige pricing.

_______-based pricing is used when there are a small number of large service providers.

If you visit a county or state fair,you will pay a basic admission fee plus other fees if you want to enjoy any of the amusement rides.County and state fairs that price this way are using:

Demand-based pricing does not consider that customers might be sensitive to nonmonetary prices and may judge quality on the basis of price.

Price visibility does not influence reference prices when selecting a stockbroker.

One of the reasons used to explain why customers evaluate goods and services differently is:

After moving to Florida,Vanessa opened both a savings and a checking account at Benford Bank.Although Benford had a higher minimum balance requirement for free checking than the other two banks she considered,Vanessa chose Benford because it was located closer to her home than the other banks.Vanessa would rather expend other costs than _____ costs.