Question 1

Price fixing refers to

Accepted Answer

A)  an arrangement a manufacturer makes with a reseller to handle only its products and not those of a competitor.
B)  the practice of charging a very low price for a product with the intent of driving competitors out of business.
C)  the practice of charging different prices to different buyers for goods of like grade and quality.
D)  a conspiracy among firms to set prices for a product.
E)  a seller's requirement that the purchaser of one product also buy another product in the line.F) None of the above
G) All of the above

Question 2

Patty O'Rourke hired an attorney to represent her in a court case involving an auto accident.The attorney charged O'Rourke a fee for his services.Terry Thomas needed a haircut--the local stylist charged him $12 for her services.Aaron Mathison mowed his neighbor's lawn; in exchange, the neighbor roto-tilled Mathison's garden.The attorney fees paid by O'Rourke, the $12 charged by the hair stylist, and exchange of lawn mowing for garden tilling are examples of

Accepted Answer

A)  price.
B)  barter.
C)  fee setting.
D)  unfair market exchanges.
E)  product fares.F) A) and B)
G) B) and D)

Question 3

FIGURE 12-9 
-Eddie Bauer (Figure 12-9 above)  uses a __________ price policy for its Thursday nationwide price markdowns.

Accepted Answer

A)  price lining
B)  customary
C)  flexible
D)  fixing
E)  discretionaryF) A) and B)
G) A) and C)

Question 4

Vizio, Inc.'s long term goal for the next 20 to 30 years is to

Accepted Answer

A)  have at least one of their products in every single home in the United States.
B)  have production facilities in every state, not only to generate profits for themselves, but to help the local economy.
C)  be the next Sony.
D)  to have every aspect of the product from design to component parts, made or manufactured in the United States.
E)  create the first completely wireless HDTVs and multi-media systems.F) A) and B)
G) C) and D)

Question 5

Setting a high price so that quality-or status-conscious consumers will be attracted to the product and buy it is referred to as

Accepted Answer

A)  skimming pricing.
B)  status pricing.
C)  price lining.
D)  value pricing.
E)  prestige pricing.F) A) and D)
G) A) and C)

Question 6

A price premium is the percentage by which the actual price charged for a specific brand exceeds (or falls short of)  a benchmark established for a similar product or basket of products.This premium can be calculated as:

Accepted Answer

A)  price premium equals dollar sales market share for a brand, divided by unit volume market share, minus 1.
B)  price premium equals unit volume share divided by dollar sales market share, minus 1.
C)  price premium equals dollar sales market share for a brand, multiplied by unit volume share, plus 1.
D)  price premium equals dollar sales market share for a brand, divided by unit volume market share, plus 1.
E)  price premium equals dollar sales market share for a brand, divided by unit volume market share, minus the number of competitors against which a brand is being measured.F) B) and E)
G) B) and D)

Question 7

Bob Biltmore owns dozens of very successful print shops throughout the Midwest.Biltmore's shops specialize in low cost black and white copies and feature user-friendly machines consumers can easily operate.In recent months, Biltmore has noticed many more competitors in the areas where his stores are located.In an attempt to eliminate the competition, Biltmore has decided to charge a very low price for his black and white copies, a price so low his competitors will be forced out of business.After the competition has been driven out, Biltmore plans to raise the price of his copies.Biltmore is planning to engage in the illegal practice of

Accepted Answer

A)  price fixing.
B)  price inflation.
C)  predatory pricing.
D)  competitive pricing.
E)  price flighting.F) All of the above
G) B) and C)

Question 8

In response to Duracell's introduction of the Duracell Ultra battery, Energizer introduced an Advanced Formula battery, but unlike Duracell, Energizer priced its batteries at a low initial price to attract the mass market.Energizer used

Accepted Answer

A)  penetration pricing.
B)  prestige pricing.
C)  skimming pricing.
D)  price lining.
E)  cost-plus fixed-fee pricing.F) A) and E)
G) A) and B)

Question 9

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

Accepted Answer

A)  rent on a building
B)  executive salaries
C)  insurance premiums
D)  lease on delivery trucks
E)  cost of maintaining inventoryF) A) and B)
G) B) and C)

Question 10

How do consumers use price as an indicator of value?

Accepted Answer

From a consumer's standpoint, price is o...

Question 11

Mark Johnson, the manager of a discount consumer electronics store, has been approached by the manufacturer of a popular and profitable line of compact disk storage racks regarding the retail price charged for the racks at Johnson's store.The manufacturer's representative has implied that if Johnson doesn't raise the retail prices for the storage racks to those charged by the manufacturer's non-discount customers, Johnson's supply of racks may be severely curtailed.The manufacturer is guilty of attempting

Accepted Answer

A)  horizontal price-fixing.
B)  resale price maintenance.
C)  price discrimination.
D)  predatory pricing.
E)  bait and switch pricing.F) A) and B)
G) C) and E)

Question 12

When Hallmark cards introduced a line of $.99 cards (about half the price of the previously less expensive cards sold by Hallmark) , 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)  penetration
D)  demand-backward
E)  experience-curveF) C) and D)
G) B) and E)

Question 13

What is the difference between a movement along a demand curve and a shift of a demand curve?

Accepted Answer

A movement along a demand curve assumes ...

Question 14

Factors that limit the range of prices a firm may set are referred to as

Accepted Answer

A)  pricing objectives.
B)  pricing restraints.
C)  pricing constraints.
D)  pricing elasticity.
E)  the pricing environment.F) B) and D)
G) C) and D)

Question 15

The quantity at which total revenue and total cost are equal is referred to as

Accepted Answer

A)  break-even point.
B)  point of maximum profit.
C)  coverage amount.
D)  incremental return quantity.
E)  shadow price quantity.F) C) and D)
G) A) and D)

Question 16

If an invoice for $45,000 is billed 2/10 net 30, what is the highest annual interest rate that one would rationally pay to borrow money in order to take advantage of the cash discount if the only consideration is a lower annual interest rate than charged on the invoice?

Accepted Answer

A)  71.9 percent
B)  9.9 percent
C)  17.9 percent
D)  23.9 percent
E)  35.9 percentF) A) and E)
G) A) and B)

Question 17

Talbot's sells women's clothes.A simple tee shirt with the Talbot's label costs $25.If you know you simply want a tee shirt, you can buy one for $5 at a Family Dollar Store, but it won't have the Talbot's label or quality.What kind of demand-oriented approach to pricing is being used by this manufacturer?

Accepted Answer

A)  experience curve pricing
B)  skimming pricing
C)  demand-backward pricing
D)  prestige pricing
E)  flexible pricingF) A) and C)
G) All of the above

Question 18

The most commonly used pricing method for business products is _________.

Accepted Answer

A)  target return on investment
B)  customary
C)  standard markup
D)  target profit
E)  cost-plus pricingF) A) and C)
G) D) and E)

Question 19

Explain why odd-even pricing may be successful.

Accepted Answer

Odd-even pricing presumes that customers...

Question 20

Factors that limit the range of prices a firm may set are referred to as _________.

Accepted Answer

A)  pricing restraints
B)  pricing constraints
C)  demand factors
D)  pricing barriers
E)  pricing restrictionsF) A) and C)
G) All of the above

Exam 12: Pricing Products and Services

Correct Answer
verified

The quantity at which total revenue and total cost are equal is referred to as

Correct Answer
verified

A price premium is the percentage by which the actual price charged for a specific brand exceeds (or falls short of) a benchmark established for a similar product or basket of products.This premium can be calculated as:

Correct Answer
verified

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

Correct Answer
verified

The most commonly used pricing method for business products is _________.

Correct Answer
verified

What is the difference between a movement along a demand curve and a shift of a demand curve?

Correct Answer
verified
A movement along a demand curve assumes ...
View Answer

Explain why odd-even pricing may be successful.

Correct Answer
verified
Odd-even pricing presumes that customers...
View Answer

Price fixing refers to

Correct Answer
verified

Correct Answer
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If an invoice for $45,000 is billed 2/10 net 30, what is the highest annual interest rate that one would rationally pay to borrow money in order to take advantage of the cash discount if the only consideration is a lower annual interest rate than charged on the invoice?

Correct Answer
verified

Correct Answer
verified

Vizio, Inc.'s long term goal for the next 20 to 30 years is to

Correct Answer
verified

Factors that limit the range of prices a firm may set are referred to as

Correct Answer
verified

Correct Answer
verified

How do consumers use price as an indicator of value?

Correct Answer
verified
From a consumer's standpoint, price is o...
View Answer

Factors that limit the range of prices a firm may set are referred to as _________.

Correct Answer
verified

When Hallmark cards introduced a line of $.99 cards (about half the price of the previously less expensive cards sold by Hallmark) , 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

Setting a high price so that quality-or status-conscious consumers will be attracted to the product and buy it is referred to as

Correct Answer
verified

FIGURE 12-9 -Eddie Bauer (Figure 12-9 above) uses a __________ price policy for its Thursday nationwide price markdowns.

Correct Answer
verified

In response to Duracell's introduction of the Duracell Ultra battery, Energizer introduced an Advanced Formula battery, but unlike Duracell, Energizer priced its batteries at a low initial price to attract the mass market.Energizer used

Correct Answer
verified

Exam 12: Pricing Products and Services

Correct AnswerverifiedShow Answer

The quantity at which total revenue and total cost are equal is referred to as

Correct AnswerverifiedShow Answer

A price premium is the percentage by which the actual price charged for a specific brand exceeds (or falls short of) a benchmark established for a similar product or basket of products.This premium can be calculated as:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The most commonly used pricing method for business products is _________.

Correct AnswerverifiedShow Answer

What is the difference between a movement along a demand curve and a shift of a demand curve?

Correct AnswerverifiedA movement along a demand curve assumes ...View AnswerShow Answer

Explain why odd-even pricing may be successful.

Correct AnswerverifiedOdd-even pricing presumes that customers...View AnswerShow Answer

Price fixing refers to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If an invoice for $45,000 is billed 2/10 net 30, what is the highest annual interest rate that one would rationally pay to borrow money in order to take advantage of the cash discount if the only consideration is a lower annual interest rate than charged on the invoice?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Vizio, Inc.'s long term goal for the next 20 to 30 years is to

Correct AnswerverifiedShow Answer

Factors that limit the range of prices a firm may set are referred to as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

How do consumers use price as an indicator of value?

Correct AnswerverifiedFrom a consumer's standpoint, price is o...View AnswerShow Answer

Factors that limit the range of prices a firm may set are referred to as _________.

Correct AnswerverifiedShow Answer

When Hallmark cards introduced a line of $.99 cards (about half the price of the previously less expensive cards sold by Hallmark) , 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

Setting a high price so that quality-or status-conscious consumers will be attracted to the product and buy it is referred to as

Correct AnswerverifiedShow Answer

FIGURE 12-9 -Eddie Bauer (Figure 12-9 above) uses a __________ price policy for its Thursday nationwide price markdowns.

Correct AnswerverifiedShow Answer

In response to Duracell's introduction of the Duracell Ultra battery, Energizer introduced an Advanced Formula battery, but unlike Duracell, Energizer priced its batteries at a low initial price to attract the mass market.Energizer used

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A movement along a demand curve assumes ...
View Answer

Correct Answer
verified
Odd-even pricing presumes that customers...
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
From a consumer's standpoint, price is o...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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