Question 1

Evergreen Inc.is a distributor of high-quality fruit, flowering, and shade trees.Every client of Evergreen Inc.is supplied with a catalogue since the prices tend to change with seasons. The prices of all the trees in the Evergreen Inc.catalogue end in $.99.The distributor uses _____.

Accepted Answer

A)  odd-even pricing
B)  dynamic pricing
C)  price lining
D)  bundle pricingE) B) and C)
F) A) and B) A

Question 2

How does skimming pricing strategy work?

Accepted Answer

A firm introducing a new product can use...

Question 3

Which of the following is true about production cost as a pricing constraint?

Accepted Answer

A)  In the short run, a firm's price must cover all the costs of producing a product.
B)  Covering the firm's costs doesn't affect pricing the product at all.
C)  In the long run, a firm's costs set a floor under its price.
D)  In the long run, a firm's costs set a ceiling over its price.E) None of the above
F) All of the above

Question 4

Elastic demand exists when:

Accepted Answer

A)  a small percentage decrease in price produces a smaller percentage increase in quantity demanded and total revenue falls.
B)  a small percentage decrease in price produces a larger percentage increase in quantity demanded and total revenue increases.
C)  an increase in price causes a larger increase in quantity demanded and total revenue falls to zero.
D)  a small percentage decrease in price produces a smaller percentage decrease in quantity demanded and total revenue increases.E) None of the above
F) All of the above B

Question 5

The manufacturer of a new variety of fat-free ice cream that has the consistency and taste of regular ice cream is considering using a skimming pricing strategy for its new product.Which of the following conditions would suggest using a skimming pricing strategy for the tasty fat-free ice cream?

Accepted Answer

A)  The ice cream market is highly conservative.
B)  A large portion of the market has inelastic demand for fat-free ice cream, over a fairly broad range of prices.
C)  Economies of scale in production are substantial.
D)  Retailers are willing to pay for new brands of premium ice cream in an extremely overcrowded category.E) C) and D)
F) None of the above

Question 6

The owner of Clock Winds incurs a fixed cost of $20,000 for equipment, taxes, and its bank loan.The unit variable cost for labour, materials, and promotional costs is $20.If the price charged for each clock is $40, what is the break-even point quantity?

Accepted Answer

A)  800
B)  1,500
C)  1,000
D)  1,200E) None of the above
F) A) and B)

Question 7

Uniform delivered pricing means the:

Accepted Answer

A)  title of goods remains with the manufacturer until sold to the ultimate consumer.
B)  pricing and title of goods passes to the buyer upon arrival at final destination.
C)  title of the goods passes to the buyer at the point of shipment.
D)  price the seller sets includes all transportation costs.E) B) and D)
F) A) and B)

Question 8

At a discount store, Paul and the other customers were offered a Wilson Sting tennis racquet at a non-variable price.Paul was left with a buy-or-not-buy choice under the store's _____.

Accepted Answer

A)  penetration strategy
B)  odd-even pricing
C)  one-price policy
D)  bundle-pricing policyE) A) and B)
F) B) and C)

Question 9

By offering lower interest rates, a company chooses to lower profits in the short run to sell its product quickly.

Accepted Answer

A) True 
 B)False

Question 10

A computer retailer shrink-wraps Microsoft Works to its private-labelled Pentium IV computer and sells the microcomputer and software for $2,500.This pricing scenario might best be described as _____.

Accepted Answer

A)  price lining
B)  loss-leader pricing
C)  bundle pricing
D)  prestige pricingE) None of the above
F) A) and D)

Question 11

A manufacturer using _____ is setting a high price so that status-conscious consumers will be attracted to the product and buy it.

Accepted Answer

A)  skimming pricing
B)  prestige pricing
C)  price lining
D)  odd-even pricingE) All of the above
F) B) and C)

Question 12

Live 'n' Homes, a company that manages apartments, decides to buy 17 new dishwashers at a list price of $750 each as replacements for old dishwashers.The merchant offers a $150 discount per unit on a purchase of more than 10 dishwashers.The company will get $10 per dishwasher for the 17 dishwashers traded in.If the financing charges total to $20 per unit, what is the price the company will pay for each dishwasher?

Accepted Answer

A)  $590
B)  $600
C)  $610
D)  $730E) A) and B)
F) B) and C)

Question 13

Trendsetter Inc.manufactures self-branded women's sportswear.The label has become synonymous with style and quality.A simple tank top with the Trendsetter label costs $48.Similar tank tops are also available at regular stores for $5 each, but without the Trendsetter label.What kind of demand-oriented approach to pricing is being used by Trendsetter Inc.to market the tank tops?

Accepted Answer

A)  experience curve pricing
B)  target market share pricing
C)  demand-backward pricing
D)  prestige pricingE) C) and D)
F) A) and B)

Question 14

Target pricing is the result of a manufacturer _____ in a product to achieve the target price.

Accepted Answer

A)  setting the highest costs possible
B)  deliberately adjusting the cost and quality of the component parts
C)  researching what markups wholesalers will accept
D)  studying competitive prices and making fixed-cost adjustmentsE) B) and C)
F) None of the above

Question 15

Which of the following is a typical example of a fixed cost?

Accepted Answer

A)  sales taxes
B)  building rental expense
C)  raw materials
D)  sales commissionsE) B) and C)
F) B) and D)

Question 16

Target profit pricing refers to setting prices that give a profit that is a specified percentage of the sales volume.

Accepted Answer

A) True 
 B)False

Question 17

Update, a weekly, ran a pricing experiment that involved setting different prices for its magazine in different cities and counting the number of units sold.After adjusting for factors such as the population of the different cities, Update was able to plot these prices and units to result in a(n)  _____.

Accepted Answer

A)  target return curve
B)  demand curve
C)  unit volume curve
D)  consumer tastes curveE) B) and C)
F) B) and D) B

Question 18

Many global companies worry that their products may be bought in countries with lower prices and resold in countries with higher prices.This is called

Accepted Answer

A)  Price fixing
B)  Grey market
C)  Dumping
D)  Price liningE) B) and C)
F) A) and D)

Question 19

The older the product and the later it is in its life cycle, the higher the price that can usually be charged.

Accepted Answer

A) True 
 B)False

Question 20

The availability of different suppliers on the Internet combines to create more products with inelastic demand.

Accepted Answer

A) True 
 B)False

Exam 9: Pricing

Evergreen Inc.is a distributor of high-quality fruit, flowering, and shade trees.Every client of Evergreen Inc.is supplied with a catalogue since the prices tend to change with seasons. The prices of all the trees in the Evergreen Inc.catalogue end in $.99.The distributor uses _____.

Correct Answer
verified
A

How does skimming pricing strategy work?

Correct Answer
verified
A firm introducing a new product can use...
View Answer

Which of the following is true about production cost as a pricing constraint?

Correct Answer
verified

Elastic demand exists when:

Correct Answer
verified
B

The manufacturer of a new variety of fat-free ice cream that has the consistency and taste of regular ice cream is considering using a skimming pricing strategy for its new product.Which of the following conditions would suggest using a skimming pricing strategy for the tasty fat-free ice cream?

Correct Answer
verified

The owner of Clock Winds incurs a fixed cost of $20,000 for equipment, taxes, and its bank loan.The unit variable cost for labour, materials, and promotional costs is $20.If the price charged for each clock is $40, what is the break-even point quantity?

Correct Answer
verified

Uniform delivered pricing means the:

Correct Answer
verified

At a discount store, Paul and the other customers were offered a Wilson Sting tennis racquet at a non-variable price.Paul was left with a buy-or-not-buy choice under the store's _____.

Correct Answer
verified

By offering lower interest rates, a company chooses to lower profits in the short run to sell its product quickly.

Correct Answer
verified

A computer retailer shrink-wraps Microsoft Works to its private-labelled Pentium IV computer and sells the microcomputer and software for $2,500.This pricing scenario might best be described as _____.

Correct Answer
verified

A manufacturer using _____ is setting a high price so that status-conscious consumers will be attracted to the product and buy it.

Correct Answer
verified

Correct Answer
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Correct Answer
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Target pricing is the result of a manufacturer _____ in a product to achieve the target price.

Correct Answer
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Which of the following is a typical example of a fixed cost?

Correct Answer
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Target profit pricing refers to setting prices that give a profit that is a specified percentage of the sales volume.

Correct Answer
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Correct Answer
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B

Many global companies worry that their products may be bought in countries with lower prices and resold in countries with higher prices.This is called

Correct Answer
verified

The older the product and the later it is in its life cycle, the higher the price that can usually be charged.

Correct Answer
verified

The availability of different suppliers on the Internet combines to create more products with inelastic demand.

Correct Answer
verified

Exam 9: Pricing

Evergreen Inc.is a distributor of high-quality fruit, flowering, and shade trees.Every client of Evergreen Inc.is supplied with a catalogue since the prices tend to change with seasons. The prices of all the trees in the Evergreen Inc.catalogue end in $.99.The distributor uses _____.

Correct AnswerverifiedA

How does skimming pricing strategy work?

Correct AnswerverifiedA firm introducing a new product can use...View AnswerShow Answer

Which of the following is true about production cost as a pricing constraint?

Correct AnswerverifiedShow Answer

Elastic demand exists when:

Correct AnswerverifiedB

The manufacturer of a new variety of fat-free ice cream that has the consistency and taste of regular ice cream is considering using a skimming pricing strategy for its new product.Which of the following conditions would suggest using a skimming pricing strategy for the tasty fat-free ice cream?

Correct AnswerverifiedShow Answer

The owner of Clock Winds incurs a fixed cost of $20,000 for equipment, taxes, and its bank loan.The unit variable cost for labour, materials, and promotional costs is $20.If the price charged for each clock is $40, what is the break-even point quantity?

Correct AnswerverifiedShow Answer

Uniform delivered pricing means the:

Correct AnswerverifiedShow Answer

At a discount store, Paul and the other customers were offered a Wilson Sting tennis racquet at a non-variable price.Paul was left with a buy-or-not-buy choice under the store's _____.

Correct AnswerverifiedShow Answer

By offering lower interest rates, a company chooses to lower profits in the short run to sell its product quickly.

Correct AnswerverifiedShow Answer

A computer retailer shrink-wraps Microsoft Works to its private-labelled Pentium IV computer and sells the microcomputer and software for $2,500.This pricing scenario might best be described as _____.

Correct AnswerverifiedShow Answer

A manufacturer using _____ is setting a high price so that status-conscious consumers will be attracted to the product and buy it.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Target pricing is the result of a manufacturer _____ in a product to achieve the target price.

Correct AnswerverifiedShow Answer

Which of the following is a typical example of a fixed cost?

Correct AnswerverifiedShow Answer

Target profit pricing refers to setting prices that give a profit that is a specified percentage of the sales volume.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedB

Many global companies worry that their products may be bought in countries with lower prices and resold in countries with higher prices.This is called

Correct AnswerverifiedShow Answer

The older the product and the later it is in its life cycle, the higher the price that can usually be charged.

Correct AnswerverifiedShow Answer

The availability of different suppliers on the Internet combines to create more products with inelastic demand.

Correct AnswerverifiedShow Answer

Correct Answer
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A

Correct Answer
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A firm introducing a new product can use...
View Answer

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B

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B

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