Question 1

Which of the following statements is most accurate?

Accepted Answer

A)  Nonprofit organizations are exempt from having to cover costs of producing and/or marketing their products.
B)  Socially responsible corporations should have the pricing objective of covering all costs of producing and marketing a company's product, but they should not price their products to earn a profit.
C)  Firms must know or anticipate what specific price its present and potential competitors are charging now or will charge.
D)  Regardless of a company's objectives, a firm must cover all the costs of producing and marketing products or the firm will fail.
E)  Elasticity of demand makes it virtually impossible for companies to cover all their marketing and production costs at all times.F) A) and B)
G) A) and C)

Question 2

Standard markup is considered to be a __________ approach to pricing.

Accepted Answer

A)  demand-oriented
B)  cost-oriented
C)  profit-oriented
D)  competition-oriented
E)  service-orientedF) B) and D)
G) A) and D)

Question 3

The total money received from the sale of a product is referred to as _________.

Accepted Answer

A)  profit
B)  total revenue
C)  average revenue
D)  marginal revenue
E)  derived revenueF) B) and D)
G) B) and E)

Question 4

If the CEO of the Clorox Company were to say, "We want to control 60 percent of the bleach market within the next five years," he would have set a __________ pricing objective.

Accepted Answer

A)  profit
B)  sales
C)  unit volume
D)  market share
E)  social responsibilityF) B) and C)
G) C) and D)

Question 5

Your local instant photocopying service charges 10 cents a copy for copies up to a quantity of 25, 9 cents a copy for 26 to 100, and 8 cents a copy for 101 or more.What kind of adjustment to list or quoted prices is the photocopying service using?

Accepted Answer

A)  bundle pricing
B)  quantity discounts
C)  loss-leader pricing
D)  promotional discounts
E)  everyday low pricingF) A) and B)
G) B) and D)

Question 6

The price the seller quotes that includes all transportation costs is referred to as _________.

Accepted Answer

A)  single-zone pricing
B)  multiple-zone pricing
C)  uniform delivered pricing
D)  FOB origin pricing
E)  FOB buyer's locationF) B) and D)
G) A) and B)

Question 7

The price equation formula is final price equals [__________] minus [(incentives)  plus (allowances) ] plus [extra fees].

Accepted Answer

A)  salaries
B)  commissions
C)  trade-ins
D)  list price
E)  taxesF) C) and E)
G) A) and E)

Question 8

Assume it costs Lady Marion Seafood, Inc.$30 to catch, process, freeze, package, and ship, 5-pound packages of Alaskan salmon.It uses a 60 percent markup on its salmon products and charges customers $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)  cost-plus fixed-fee pricing
C)  standard markup pricing
D)  target profit pricing
E)  customary pricingF) All of the above
G) B) and C)

Question 9

In the cash discount $500, 4/10 net 30, the number $500 refers to

Accepted Answer

A)  the original price owed on the merchandise.
B)  the total amount owed if paid within 10 days.
C)  the total discount in dollars, if the bill is paid on time.
D)  the penalty in dollars if the bill is not paid within 10 days.
E)  the total penalty in dollars if the bill is paid after 10 days.F) A) and C)
G) C) and D)

Question 10

Deceptive pricing is outlawed by the

Accepted Answer

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

Question 11

Describe a profit objective used by many Japanese firms.

Accepted Answer

Managing for long-run profits is a prici...

Question 12

The unit variable cost (UVC)  equals [variable cost] divided by [__________]

Accepted Answer

A)  fixed costs.
B)  total cost.
C)  quantity.
D)  total revenue.
E)  price per unit of the product.F) B) and C)
G) A) and D)

Question 13

The word "Free" for FOB signals the point or location where the seller is

Accepted Answer

A)  free of responsibility for customer invoicing.
B)  free of product liability.
C)  free to choose method of transportation.
D)  free to choose the point of loading.
E)  free to choose the method of payment.F) None of the above
G) C) and D)

Question 14

Which of the following statements about geographical adjustments to price is most accurate?

Accepted Answer

A)  In FOB origin pricing, the seller selects the mode of transportation.
B)  In FOB with freight-allowed pricing, the seller subtracts the transportation costs from the list price.
C)  Multiple-zone pricing is sometimes referred to as "crazy quilt" pricing.
D)  Basing point pricing seems to have been used in industries where freight expenses are only a minor part of the total cost to the buyer.
E)  Geographical adjustments can be subject government regulation if the firm cannot supply objective data (lists of mountains, rivers, weather conditions, etc.)  explaining why those adjustments need to be made.F) B) and D)
G) A) and B)

Question 15

competition-oriented approaches.

Accepted Answer

A)  cost-oriented
B)  cause-oriented
C)  revenue-oriented
D)  reduced risk-oriented
E)  profit-orientedF) B) and C)
G) A) and D)

Question 16

What do 60 percent of prospective buyers dread about looking for a new car?

Accepted Answer

A)  selecting the preferred brand
B)  negotiating the price
C)  doing test drives
D)  understanding electronic features
E)  taking the time to do itF) B) and D)
G) All of the above

Question 17

Specialty-toy retailers increasingly are primarily facing __________ because they can't match price cuts by big discount retailers and some are filing for bankruptcy.

Accepted Answer

A)  increasing market share
B)  survival problems
C)  decreased competition
D)  pricing constraints
E)  increased demandF) A) and C)
G) B) and C)

Question 18

A break-even chart refers to a

Accepted Answer

A)  graphic presentation relating the quantity sold and price, which shows the maximum number of units that will be sold at a certain price.
B)  graphic presentation of the break-even analysis that shows when total revenue and total cost intersect to identify profit or loss for a given quantity sold.
C)  graphic presentation relating variable costs in terms of product or service substitutes in order to determine which items or services would least affect total revenues.
D)  graphic presentation relating profits and revenues versus total costs in order to determine the time frame in which a company could achieve profitability.
E)  graphic presentation in the form of a scatter graph used to identify specific activities or items that are creating the greatest return on investment.F) A) and B)
G) B) and E)

Question 19

Which of the following statements about the product life cycle as a pricing constraint is most accurate?

Accepted Answer

A)  The newer a product is, the higher the price that can usually be charged.
B)  The later in the product life cycle the product is, the higher the price that can usually be charged.
C)  Once a product is considered nostalgic, the price will continue to rise indefinitely.
D)  Fads will generally have only two price points-high and low-but the value of those price points will remain basically the same.
E)  Prices should not be changed until a product reaches the maturity stage.F) B) and E)
G) A) and E)

Question 20

If you were to buy five dwarf peach trees from the Stark Bros.fruit trees and landscaping catalog in five separate orders, you will pay $108.99, but if you order its assortment (1 each of five different dwarf peach trees) , you pay $89.99.Stark Bros.uses

Accepted Answer

A)  standard markup pricing.
B)  bundle pricing.
C)  prestige pricing.
D)  price lining.
E)  demand-backward pricing.F) All of the above
G) A) and E)

Exam 12: Pricing Products and Services

Standard markup is considered to be a __________ approach to pricing.

Correct AnswerverifiedShow Answer

What do 60 percent of prospective buyers dread about looking for a new car?

Correct AnswerverifiedShow Answer

Deceptive pricing is outlawed by the

Correct AnswerverifiedShow Answer

The price the seller quotes that includes all transportation costs is referred to as _________.

Correct AnswerverifiedShow Answer

Which of the following statements about geographical adjustments to price is most accurate?

Correct AnswerverifiedShow Answer

In the cash discount $500, 4/10 net 30, the number $500 refers to

Correct AnswerverifiedShow Answer

Your local instant photocopying service charges 10 cents a copy for copies up to a quantity of 25, 9 cents a copy for 26 to 100, and 8 cents a copy for 101 or more.What kind of adjustment to list or quoted prices is the photocopying service using?

Correct AnswerverifiedShow Answer

Assume it costs Lady Marion Seafood, Inc.$30 to catch, process, freeze, package, and ship, 5-pound packages of Alaskan salmon.It uses a 60 percent markup on its salmon products and charges customers $48 for a postage-paid vacuum-sealed package.What type of pricing does Lady Marion Seafood use?

Correct AnswerverifiedShow Answer

The total money received from the sale of a product is referred to as _________.

Correct AnswerverifiedShow Answer

Specialty-toy retailers increasingly are primarily facing __________ because they can't match price cuts by big discount retailers and some are filing for bankruptcy.

Correct AnswerverifiedShow Answer

Describe a profit objective used by many Japanese firms.

Correct AnswerverifiedManaging for long-run profits is a prici...View AnswerShow Answer

competition-oriented approaches.

Correct AnswerverifiedShow Answer

A break-even chart refers to a

Correct AnswerverifiedShow Answer

If you were to buy five dwarf peach trees from the Stark Bros.fruit trees and landscaping catalog in five separate orders, you will pay $108.99, but if you order its assortment (1 each of five different dwarf peach trees) , you pay $89.99.Stark Bros.uses

Correct AnswerverifiedShow Answer

If the CEO of the Clorox Company were to say, "We want to control 60 percent of the bleach market within the next five years," he would have set a __________ pricing objective.

Correct AnswerverifiedShow Answer

The unit variable cost (UVC) equals [variable cost] divided by [__________]

Correct AnswerverifiedShow Answer

Which of the following statements about the product life cycle as a pricing constraint is most accurate?

Correct AnswerverifiedShow Answer

Which of the following statements is most accurate?

Correct AnswerverifiedShow Answer

The word "Free" for FOB signals the point or location where the seller is

Correct AnswerverifiedShow Answer

The price equation formula is final price equals [__________] minus [(incentives) plus (allowances) ] plus [extra fees].

Correct AnswerverifiedShow Answer

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Managing for long-run profits is a prici...
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