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Exam 17: Pricing in Retailing

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Question 51

Multiple Choice

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Both loss leaders and leader pricing seek to _____.

A) maximize a retailer's return on investment
B) increase early recovery of cash for a retailer
C) reduce marginal competitors through aggressive pricing practices
D) increase store traffic and sales of regular markup merchandise

E) A) and B)
F) C) and D)

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Question 52

Multiple Choice

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The difference between merchandise costs and selling price is the retailer's _____.

A) markup
B) gross profit return on investment
C) net profit
D) markdown

E) B) and C)
F) A) and D)

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Question 53

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Return on investment and early recovery of cash are two sales-based pricing goals for retailers using a market skimming strategy.

If demand-oriented pricing specifies the maximum price consumers will pay for a good or service,then cost-oriented pricing sets _____.

A retailer selling men's clothing is anticipating changing its markup from 50 percent to 35 percent to stimulate additional sales.It needs a 43 percent sales increase to maintain its former gross profit.

A demand-related difficulty with a retailer utilizing loss leaders is that it affects _____.

The Robinson-Patman Act seeks to prevent large retailers from using their bargaining power to receive unjustifiable cost savings.

Administered pricing utilizes nonprice competition components such as _____.

A stationery retailer generally prices portable copiers using a 30 percent markup.The retailer expects to sell 125 portable copiers at the 30 percent markup.How many units would it have to sell at a 40 percent markup to maintain the same gross profit?

Vertical price fixing strategies are _____.

The major difference between an initial markup and a maintained markup is that the maintained markup reflects _____.

A market skimming strategy can be used in conjunction with _____.

Government guidelines with regard to the advertising of retail prices are published by _____.

What types of goods are transshipped by other retailers?

A movie theater finds that when it reduces its prices,its total revenues drop significantly.Its price elasticity of demand is _____.

Large gaps between price levels are a major problem associated with multiple-unit pricing.

Federal pricing legislation applies to _____.

Unit pricing legislation is necessary because of _____.

In which pricing technique does a retailer advertise and sell key items in the product assortment at less than their usual profit margins?

The sensitivity of consumers to price changes is measured by the _____.