Question 1

All of the following are profit-oriented approaches to select an approximate price level except which?

Accepted Answer

A)   target ROI pricing
B)   target profit pricing
C)   target return-on-sales pricing
D)   target return-on-investment pricing
E)   cost-plus-percentage-of-cost pricingF) All of the above
G) A) and E)

Question 2

Assuming there is no change in a product's price or the quantity demanded, if a business owner wants to increase her advertising expenses to $500 monthly, this would cause total costs to ________ and the break-even quantity to ________.

Accepted Answer

A)   decrease; stay the same
B)   increase; increase
C)   decrease; increase
D)   stay the same; increase
E)   stay the same; decreaseF) A) and B)
G) A) and C)

Question 3

During the iPad's ________ stage of its product life cycle, Apple had great latitude in setting a price for the product because of a lack of competition.

Accepted Answer

A)   decline
B)   maturity
C)   growth
D)   accelerated development
E)   introductionF) C) and D)
G) B) and C)

Question 4

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) B) and D)
G) C) and D)

Question 5

Tim Marlow, the owner of The Clock Works, wanted to know how many clocks he must sell in order to cover his fixed cost at a given price. Marlow knew that he had total fixed costs of $20,000 for equipment, taxes, and a bank loan. He also had a unit variable cost of $20 per clock for labor and materials. If the price Marlow charges for each of his clocks is $40, what is his break-even point quantity?

Accepted Answer

A)   100 clocks
B)   334 clocks
C)   500 clocks
D)   1,000 clocks
E)   10,000 clocksF) B) and C)
G) A) and C)

Question 6

Setting the highest initial price that customers who really desire the product are willing to pay when introducing a new or innovative product is referred to as

Accepted Answer

A)   a skimming strategy.
B)   a penetration strategy.
C)   a price-lining strategy.
D)   an experience-curve pricing strategy.
E)   a prestige pricing strategy.F) A) and C)
G) C) and D)

Question 7

It costs Lady Marion Seafood, Inc., $30 to catch, process, freeze, package, and ship five-pound packages of Alaskan salmon. The firm adds 60 percent to the cost of its salmon products and charges customers a total of $48 for a postage-paid, vacuum-sealed package. What type of pricing does Lady Marion Seafood use?

Accepted Answer

A)   target return-on-sales pricing
B)   bundle pricing
C)   standard markup pricing
D)   target profit pricing
E)   customary pricingF) A) and B)
G) C) and D)

Question 8

If a firm's profit is high enough for it to remain in business, a pricing objective may be to ________, which will in turn may lead to increases in market share and profit.

Accepted Answer

A)   increase the commitment to social responsibility
B)   increase dollar sales revenue
C)   decrease unit volume while maintaining price
D)   increase research and development funding for new product line extensions
E)   continue with previous policies that seem to be workingF) B) and D)
G) B) and C)

Question 9

Which of the following statements is most accurate?

Accepted Answer

A)   Nonprofit organizations are exempt from having to cover the costs of producing and/or marketing their products.
B)   Socially responsible corporations should have the pricing constraint of covering all costs of producing and marketing their products, but they should not price their products to earn a profit.
C)   Marketers must ensure that firms in their channels of distribution make an adequate profit or they will be cut off from their customers.
D)   Price elasticity of demand makes it virtually impossible for companies to cover all their marketing and production costs at all times.
E)   Marketing and production costs are the most difficult and expensive aspect of pricing because they draw so much capital away from other departments in the organization.F) C) and D)
G) C) and E)

Question 10

Figure 11-7
-Figure 11-7 above depicts a

Accepted Answer

A)   Gantt chart.
B)   demand curve.
C)   break-even chart.
D)   ROI analysis.
E)   cross-tabulation.F) A) and D)
G) All of the above

Question 11

With a cost-oriented pricing strategy, a price setter stresses the ________ side of the pricing problem and the price is set by looking at ________.

Accepted Answer

A)   demand; revenue
B)   production; profit
C)   demand; target sales
D)   cost; production and marketing expenses
E)   cost; consumer tastesF) B) and D)
G) All of the above

Question 12

Bundle pricing refers to

Accepted Answer

A)   an extra amount of "free goods" awarded to sellers in the channel of distribution for promoting a product.
B)   marketing two or more products in a single package price.
C)   using BOGOs-requiring customers to "buy one to get one free" as a strategy to increase sales and profits.
D)   setting the price of a line of products at two specific pricing points.
E)   the practice of charging two or more prices depending upon the outlet carrying the product.F) All of the above
G) None of the above

Question 13

Hormel offers its food distributors a discount of 15 percent for payment within 10 days on orders of all Jiffy brand products. Hormel is giving its customers a

Accepted Answer

A)   trade discount.
B)   cash discount.
C)   promotional allowance.
D)   rebate.
E)   functional discount.F) A) and B)
G) None of the above

Question 14

Figure 11-6a
-In the break-even chart in Figure 11-7a above, the triangular area GAF represents the firm's

Accepted Answer

A)   fixed costs.
B)   break-even point.
C)   variable costs.
D)   profit.
E)   total revenue.F) B) and E)
G) B) and C)

Question 15

Seasonal discounts are used by manufacturers 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 C)
G) None of the above

Question 16

A skimming pricing policy is likely to be most effective when

Accepted Answer

A)   consumers perceive the company's product to be similar to others on the market.
B)   a lower price will significantly lower fixed costs.
C)   the company's product is easily and quickly duplicated.
D)   consumers tend to be price-sensitive.
E)   the high initial price will not attract competitors.F) A) and B)
G) A) and E)

Question 17

According to the price equation, final price equals list price minus ________ plus extra fees.

Accepted Answer

A)   profits
B)   commissions
C)   trade-ins
D)   taxes
E)   allowancesF) A) and B)
G) A) and C)

Question 18

Three different objectives relate to a firm's profit, which have different implications for pricing strategy. The three profit-oriented objectives include ________, managing current profit, and achieving a target return.

Accepted Answer

A)   accumulating profits
B)   managing for long-run profits
C)   reinvesting profits
D)   redistributing profits
E)   maximizing gross marginF) A) and E)
G) C) and E)

Question 19

While pricing objectives frequently reflect corporate goals, pricing constraints often relate to

Accepted Answer

A)   stockholder demands.
B)   political ideology.
C)   conditions existing in the marketplace.
D)   an organization's code of ethics.
E)   the financial realities within the organization itself.F) A) and B)
G) C) and D)

Question 20

To promote their business, some psychics advertise free tarot-card readings and other insights into their customers' futures on television. Unfortunately, this "free reading" has cost some unsuspecting callers as much as $700 in phone charges. This sort of pricing practice would be primarily monitored by the

Accepted Answer

A)   Consumer Protection Agency.
B)   U.S. Department of Justice.
C)   Federal Trade Commission.
D)   Federal Communications Commission.
E)   Consumer Product Safety Commission.F) A) and C)
G) B) and E)

Exam 11: Pricing Products and Services

All of the following are profit-oriented approaches to select an approximate price level except which?

Correct Answer
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Correct Answer
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Correct Answer
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Three different objectives relate to a firm's profit, which have different implications for pricing strategy. The three profit-oriented objectives include ________, managing current profit, and achieving a target return.

Correct Answer
verified

Correct Answer
verified

Skimming pricing refers to

Correct Answer
verified

During the iPad's ________ stage of its product life cycle, Apple had great latitude in setting a price for the product because of a lack of competition.

Correct Answer
verified

Setting the highest initial price that customers who really desire the product are willing to pay when introducing a new or innovative product is referred to as

Correct Answer
verified

Bundle pricing refers to

Correct Answer
verified

Figure 11-6a -In the break-even chart in Figure 11-7a above, the triangular area GAF represents the firm's

Correct Answer
verified

Figure 11-7 -Figure 11-7 above depicts a

Correct Answer
verified

If a firm's profit is high enough for it to remain in business, a pricing objective may be to ________, which will in turn may lead to increases in market share and profit.

Correct Answer
verified

While pricing objectives frequently reflect corporate goals, pricing constraints often relate to

Correct Answer
verified

With a cost-oriented pricing strategy, a price setter stresses the side of the pricing problem and the price is set by looking at .

Correct Answer
verified

Hormel offers its food distributors a discount of 15 percent for payment within 10 days on orders of all Jiffy brand products. Hormel is giving its customers a

Correct Answer
verified

Which of the following statements is most accurate?

Correct Answer
verified

According to the price equation, final price equals list price minus ________ plus extra fees.

Correct Answer
verified

A skimming pricing policy is likely to be most effective when

Correct Answer
verified

Assuming there is no change in a product's price or the quantity demanded, if a business owner wants to increase her advertising expenses to $500 monthly, this would cause total costs to and the break-even quantity to .

Correct Answer
verified

Seasonal discounts are used by manufacturers to

Correct Answer
verified

Exam 11: Pricing Products and Services

All of the following are profit-oriented approaches to select an approximate price level except which?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Three different objectives relate to a firm's profit, which have different implications for pricing strategy. The three profit-oriented objectives include ________, managing current profit, and achieving a target return.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Skimming pricing refers to

Correct AnswerverifiedShow Answer

During the iPad's ________ stage of its product life cycle, Apple had great latitude in setting a price for the product because of a lack of competition.

Correct AnswerverifiedShow Answer

Setting the highest initial price that customers who really desire the product are willing to pay when introducing a new or innovative product is referred to as

Correct AnswerverifiedShow Answer

Bundle pricing refers to

Correct AnswerverifiedShow Answer

Figure 11-6a -In the break-even chart in Figure 11-7a above, the triangular area GAF represents the firm's

Correct AnswerverifiedShow Answer

Figure 11-7 -Figure 11-7 above depicts a

Correct AnswerverifiedShow Answer

If a firm's profit is high enough for it to remain in business, a pricing objective may be to ________, which will in turn may lead to increases in market share and profit.

Correct AnswerverifiedShow Answer

While pricing objectives frequently reflect corporate goals, pricing constraints often relate to

Correct AnswerverifiedShow Answer

With a cost-oriented pricing strategy, a price setter stresses the ________ side of the pricing problem and the price is set by looking at ________.

Correct AnswerverifiedShow Answer

Hormel offers its food distributors a discount of 15 percent for payment within 10 days on orders of all Jiffy brand products. Hormel is giving its customers a

Correct AnswerverifiedShow Answer

Which of the following statements is most accurate?

Correct AnswerverifiedShow Answer

According to the price equation, final price equals list price minus ________ plus extra fees.

Correct AnswerverifiedShow Answer

A skimming pricing policy is likely to be most effective when

Correct AnswerverifiedShow Answer

Assuming there is no change in a product's price or the quantity demanded, if a business owner wants to increase her advertising expenses to $500 monthly, this would cause total costs to ________ and the break-even quantity to ________.

Correct AnswerverifiedShow Answer

Seasonal discounts are used by manufacturers to

Correct AnswerverifiedShow Answer

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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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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Correct Answer
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Correct Answer
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Correct Answer
verified

With a cost-oriented pricing strategy, a price setter stresses the side of the pricing problem and the price is set by looking at .

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Assuming there is no change in a product's price or the quantity demanded, if a business owner wants to increase her advertising expenses to $500 monthly, this would cause total costs to and the break-even quantity to .

Correct Answer
verified

Correct Answer
verified