Question 1

There are factors other than price that affect demand.What are they and how do they work?

Accepted Answer

Price is not the complete story in estim...

Question 2

Using __________,many retailers deliberately sell products below their normal prices (and sometimes below cost) to attract attention and additional store traffic.

Accepted Answer

A)  customary pricing
B)  below-market pricing
C)  prestige pricing
D)  penetration pricing
E)  loss-leader pricingF) A) and B)
G) All of the above

Question 3

There are four common approaches to selecting an approximate price level.List and provide a brief description for each one.

Accepted Answer

Four common approaches to helping find t...

Question 4

Figure 11-2
-Figure 11-2 above represents the four approaches to selecting an appropriate price level."A" represents which approach?

Accepted Answer

A)  cost-oriented approach
B)  profit-oriented approach
C)  competition-oriented approach
D)  demand-oriented approach
E)  results-oriented approachF) A) and B)
G) A) and C)

Question 5

A Patek Philippe Platinum World Time wristwatch is among the most expensive in the world,costing several million dollars.This is an example of a __________ strategy.

Accepted Answer

A)  penetration pricing
B)  target pricing
C)  bundle pricing
D)  loss leader pricing
E)  prestige pricingF) A) and B)
G) A) and C)

Question 6

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

Question 7

Washburn recently purchased Parker Guitar,another guitar manufacturer that designed products for professionals and collectors,and will combine the two production facilities into a new location.Washburn expects the acquisition to reduce its rent and tax expenses by 40 percent,and the new skilled employees will reduce the hours of work needed for each unit by 15 percent.This would cause the slope of the total cost curve to _________ and the break-even quantity to _________.

Accepted Answer

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

Question 8

A skimming pricing policy is likely to be most effective when

Accepted Answer

A)  consumers tend to be price sensitive.
B)  it will be easier to set measurable sales unit goals.
C)  a lower price will significantly lower fixed costs.
D)  consumers perceive your product to be similar to other products on the market.
E)  lowering the price has only a minor effect on increasing sales volume and reducing unit costs.F) A) and D)
G) A) and B)

Question 9

A firm's profit equation equals

Accepted Answer

A)  Total cost + Total revenue or [(Fixed cost + Variable cost) + (Unit price × Quantity sold) ].
B)  Total revenue − Total cost or [ (Unit price × Quantity sold) − (Fixed cost + Variable cost) ].
C)  Total cost − Marginal cost or [(Fixed cost + Variable cost) - (Unit price × Quantity sold) ].
D)  Total cost − Variable cost or [(Fixed cost + Variable cost) - (Unit price × Quantity sold) ].
E)  Total revenue / Total cost or [(Unit price × Quantity sold) / (Fixed cost + Variable cost) ].F) A) and B)
G) A) and C)

Question 10

Managing for long-run profits implies that a company

Accepted Answer

A)  will give up immediate profit in exchange for achieving a higher market share in hopes of penetrating competitive markets.
B)  will maintain a given price range to ensure there is no loss of customers over time,even if the profit margin declines.
C)  all profits will be invested in bonds or other certificates of deposit in order to counteract any drastic economic changes in the future.
D)  all profits will be reinvested into market research or product research rather than returned to shareholders.
E)  all products,product lines,or divisions that cannot maintain their pricing goals will be dropped.F) B) and D)
G) B) and C)

Question 11

Which of the following statements about the factors that influence demand is true?

Accepted Answer

A)  As the availability of close substitutes increases,the demand for a product increases.
B)  As real consumer income increases,the demand for a product increases.
C)  As the price of close substitutes increases,the demand for a product declines.
D)  Changing consumer tastes have little impact on the demand for a product.
E)  As real consumer income decreases,the demand for a product increases.F) A) and B)
G) All of the above

Question 12

Two or more competitors explicitly or implicitly setting prices is referred to as __________.

Accepted Answer

A)  competitive collusion
B)  vertical price fixing
C)  horizontal price fixing
D)  lateral price fixing
E)  price cooperationF) A) and D)
G) A) and E)

Question 13

Reductions from list or quoted prices to buyers for performing some activity,similar to discounts,are referred to as

Accepted Answer

A)  allowances.
B)  subsidies.
C)  remittances.
D)  noncumulative deductions.
E)  list price deductions.F) A) and C)
G) A) and B)

Question 14

Attorneys' fees,entrance fees,train fares,and organization dues are all examples of

Accepted Answer

A)  premiums.
B)  barter.
C)  profit.
D)  price.
E)  outlays.F) C) and E)
G) None of the above

Question 15

-Consider the flexible pricing chart above,which shows the results of a National Bureau of Economic Research study of 750,000 car purchases.The data indicate that some groups of car buyers,on average,paid roughly $105,$423,and $483 respectively,for a new car in the $21,000 range than the typical purchaser.Who are the car buyers in "A?"

Accepted Answer

A)  women
B)  the elderly
C)  Hispanics
D)  African Americans
E)  Asian AmericansF) A) and B)
G) C) and E)

Question 16

The formula,Total revenue − Total cost,or [(Unit price × Quantity sold) − (Fixed cost + Variable cost) ] represents __________.

Accepted Answer

A)  the value equation
B)  the sales ratio
C)  average revenue
D)  the break-even point
E)  the profit equationF) A) and C)
G) A) and B)

Question 17

The pricing approach that: (1) estimates the price that ultimate consumers would be willing to pay for a product; (2) works backward through markups taken by retailers and wholesalers to determine what price to charge wholesalers; and (3) results in the manufacturer deliberately adjusting the composition and features of the product to achieve the target price to consumers is referred to as __________.

Accepted Answer

A)  cost-benefit pricing
B)  cost-plus percentage-of-cost pricing
C)  target pricing
D)  cost-plus fixed-fee pricing
E)  product feature pricingF) B) and E)
G) D) and E)

Question 18

Price elasticity of demand (E) is expressed as (∆ means change) :

Accepted Answer

A)  E = Percentage change in price (%∆ in P) ÷ Percentage change in quantity demanded (%∆ in Q) .
B)  E = Price (P) ÷ Quantity demanded (Q) .
C)  E = Percentage change in quantity demanded (%∆ in Q) ÷ Percentage change in price (%∆ in P) .
D)  E = Quantity demanded (Q) ÷ Price (P) .
E)  E = Quantity demanded (Q) × Price (P) .F) D) and E)
G) A) and B)

Question 19

A skimming pricing policy is likely to be most effective when: (1) lowering the price has only a minor effect on increasing sales volume and reducing unit costs; (2) when the high initial price does not attract competitors; (3) customers interpret high price as signifying high quality; and (4) __________.

Accepted Answer

A)  enough customers are willing to buy immediately at the high initial price
B)  consumers tend to be price sensitive
C)  it will be easier to set measurable sales unit goals
D)  a lower price will significantly reduce unit costs
E)  consumers perceive your product to be similar to other products on the marketF) A) and B)
G) All of the above

Question 20

A company that manages apartments decides to buy 15 new dishwashers at a list price of $550 each as replacements for old dishwashers in a small apartment complex it owns.Because the company is buying more than 10 dishwashers,it is eligible for a $150-per-unit quantity discount.Financing charges total $20 per unit.The company gets $10 per dishwasher for the 15 dishwashers traded in.What is the final price the company will pay for each dishwasher (not the total cost) ?

Accepted Answer

A)  $390
B)  $400
C)  $410
D)  $430
E)  $730F) A) and B)
G) A) and C)

Exam 11: Pricing Products and Services

Managing for long-run profits implies that a company

Correct Answer
verified

The formula,Total revenue − Total cost,or [(Unit price × Quantity sold) − (Fixed cost + Variable cost) ] represents __________.

Correct Answer
verified

Which of the following statements about the factors that influence demand is true?

Correct Answer
verified

Correct Answer
verified

Using __________,many retailers deliberately sell products below their normal prices (and sometimes below cost) to attract attention and additional store traffic.

Correct Answer
verified

There are factors other than price that affect demand.What are they and how do they work?

Correct Answer
verified
Price is not the complete story in estim...
View Answer

Two or more competitors explicitly or implicitly setting prices is referred to as __________.

Correct Answer
verified

Reductions from list or quoted prices to buyers for performing some activity,similar to discounts,are referred to as

Correct Answer
verified

A skimming pricing policy is likely to be most effective when

Correct Answer
verified

Correct Answer
verified

There are four common approaches to selecting an approximate price level.List and provide a brief description for each one.

Correct Answer
verified
Four common approaches to helping find t...
View 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 Answer
verified

Price elasticity of demand (E) is expressed as (∆ means change) :

Correct Answer
verified

Correct Answer
verified

Attorneys' fees,entrance fees,train fares,and organization dues are all examples of

Correct Answer
verified

Correct Answer
verified

Figure 11-2 -Figure 11-2 above represents the four approaches to selecting an appropriate price level."A" represents which approach?

Correct Answer
verified

Correct Answer
verified

A Patek Philippe Platinum World Time wristwatch is among the most expensive in the world,costing several million dollars.This is an example of a __________ strategy.

Correct Answer
verified

A firm's profit equation equals

Correct Answer
verified

Exam 11: Pricing Products and Services

Managing for long-run profits implies that a company

Correct AnswerverifiedShow Answer

The formula,Total revenue − Total cost,or [(Unit price × Quantity sold) − (Fixed cost + Variable cost) ] represents __________.

Correct AnswerverifiedShow Answer

Which of the following statements about the factors that influence demand is true?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Using __________,many retailers deliberately sell products below their normal prices (and sometimes below cost) to attract attention and additional store traffic.

Correct AnswerverifiedShow Answer

There are factors other than price that affect demand.What are they and how do they work?

Correct AnswerverifiedPrice is not the complete story in estim...View AnswerShow Answer

Two or more competitors explicitly or implicitly setting prices is referred to as __________.

Correct AnswerverifiedShow Answer

Reductions from list or quoted prices to buyers for performing some activity,similar to discounts,are referred to as

Correct AnswerverifiedShow Answer

A skimming pricing policy is likely to be most effective when

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

There are four common approaches to selecting an approximate price level.List and provide a brief description for each one.

Correct AnswerverifiedFour common approaches to helping find t...View AnswerShow 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

Price elasticity of demand (E) is expressed as (∆ means change) :

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Attorneys' fees,entrance fees,train fares,and organization dues are all examples of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 11-2 -Figure 11-2 above represents the four approaches to selecting an appropriate price level."A" represents which approach?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A Patek Philippe Platinum World Time wristwatch is among the most expensive in the world,costing several million dollars.This is an example of a __________ strategy.

Correct AnswerverifiedShow Answer

A firm's profit equation equals

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Price is not the complete story in estim...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Four common approaches to helping find t...
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
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Correct Answer
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