Question 1

Which of the following statements about the legal and regulatory aspect of pricing is most accurate?

Accepted Answer

A)  The Robinson-Patman Act deals with predatory pricing.
B)  The Consumer Goods Pricing Act is the only federal legislation that deals directly with pricing issues.
C)  The Sherman Act deals only with vertical price fixing.
D)  The Federal Trade Commission Act deals with deceptive pricing issues.
E)  The Consumer Goods Pricing Act and the Robinson-Patman Act deal with price discrimination.F) None of the above
G) All of the above

Question 2

Tim Marlow, the owner of The Clock Works, wanted to know how many clocks he must sell in order to cover his fixed cost at a given price.Tim knew that he had a fixed cost of $20,000 for equipment, taxes, and a bank loan.He also had a unit variable cost of $20 per clock for labor, and materials.If the price Tim charges for each of his clocks is $40, what is his break-even point quantity?

Accepted Answer

A)  10 clocks
B)  100 clocks
C)  1,000 clocks
D)  10,000 clocks
E)  cannot be determined from the information providedF) B) and C)
G) D) and E)

Question 3

All things being equal, if a firm finds the demand for one of its products is inelastic, it can increase its total revenues by

Accepted Answer

A)  raising its price.
B)  lowering its price.
C)  reducing fixed costs.
D)  reducing variable costs.
E)  reducing both fixed and variable costs.F) A) and E)
G) B) and C)

Question 4

Yield management pricing is most consistent with services trying to deal with

Accepted Answer

A)  capacity management.
B)  perceived risk.
C)  cognitive dissonance.
D)  inelasticity of demand.
E)  new product strategy development.F) B) and C)
G) A) and B)

Question 5

Washburn Guitars broke their guitars into four distinct market segments.Each segment would be priced accordingly.Their mass produced instruments were intended to appeal to

Accepted Answer

A)  first-time buyers.
B)  professional musicians.
C)  stars and famous musicians.
D)  guitar collectors and music aficionados.
E)  intermediate skill players who might (or might not)  become professional musicians.F) B) and C)
G) All of the above

Question 6

One problem in the interstate trucking industry is the number of trucks that return after making a delivery with an empty truck.There is a Web site where independent interstate truckers can look for loads that they can carry with them on their return trip.Because the trucks would be returning empty (and inefficiently) , truckers, who use this Web site to get business that they would not have had without it, give a reduced shipping rate.This reduced rate is an example of

Accepted Answer

A)  yield management pricing.
B)  penetration pricing.
C)  target pricing.
D)  cost-plus pricing.
E)  odd-even pricing.F) C) and E)
G) B) and D)

Question 7

Another name for a one-price policy is

Accepted Answer

A)  customary pricing.
B)  fixed pricing.
C)  flexible-pricing.
D)  standard markup.
E)  blanket price.F) A) and C)
G) None of the above

Question 8

The practice of exchanging products and services for other products and services rather than for money is referred to as _________.

Accepted Answer

A)  barter
B)  value-pricing
C)  reciprocal pricing
D)  pricing substitution
E)  debt restructuringF) A) and D)
G) None of the above

Question 9

Which of the following statements regarding pricing objectives is most accurate?

Accepted Answer

A)  Generally, the greater the demand for a product, the higher the price that can be set.
B)  At the corporate level, when setting pricing objectives and constraints, a firm must disregard current conditions in the marketplace because they are too temporal for long-term planning.
C)  Pricing objectives must always be set, but they are rarely achieved; they provide a framework rather than actual expectations.
D)  It is possible to create pricing objectives with the greatest range possible in order to anticipate any and all changes in the marketing environment.
E)  Even if a firm is trying to satisfy its obligations to its customers and society, in general it should never forego making a profit.F) B) and E)
G) B) and C)

Question 10

The ratio of perceived benefits to price is referred to as

Accepted Answer

A)  the price-quality relationship.
B)  value-added pricing.
C)  prestige pricing.
D)  value-analysis.
E)  value.F) A) and B)
G) B) and D)

Question 11

Yield management pricing refers to

Accepted Answer

A)  controlling the production of goods based upon seasonal demand.
B)  deliberately selling a product below its customary price, not to increase sales, but to attract customers' attention in hopes that they will buy other products as well.
C)  deliberately selling a product below its customary price, not to increase sales, but to attract customers' attention in hopes that the strategy will yield a large portion of the competitor's market share.
D)  offering significant price discounts to wholesalers who agree to purchase products in advance for a period of a year or more at a time.
E)  charging different prices to maximize revenue for a set amount of capacity at any given time.F) A) and B)
G) A) and C)

Question 12

Reference value involves comparing the costs and benefits of _________.

Accepted Answer

A)  substitute items
B)  intangible items
C)  items of equal or greater value
D)  products with which a consumer is familiar and items the consumer has not seen or used before
E)  items from one particular distributorF) C) and E)
G) A) and B)

Question 13

FIGURE 12-5 
-Figure 12-5 above shows that when the price moves from $2.00 to $1.50 per unit, the quantity demanded increases from 3 million to 4.5 million.This is an example of a

Accepted Answer

A)  shift of demand curve.
B)  scaling back a demand curve.
C)  price elasticity curve.
D)  price inelasticity curve.
E)  movement along a demand curve.F) C) and D)
G) A) and B)

Question 14

FIGURE 12-6 
-A shift of the demand curve from D1 to D2 in Figure 12-6 above indicates

Accepted Answer

A)  more units are demanded at a given price.
B)  fewer units are demanded at a given price.
C)  the price has decreased.
D)  the price has increased.
E)  There is not enough information given to indicate what happened.F) A) and B)
G) A) and C)

Question 15

With a cost oriented pricing strategy, a price setter stress the __________ side of the pricing problem and the price is set by looking at _________.

Accepted Answer

A)  demand; revenue
B)  production and marketing; profit
C)  demand; target sales
D)  cost; production and marketing costs
E)  cost; consumer demandF) A) and B)
G) B) and D)

Question 16

Given that a firm's profit is high enough for it to remain in business, a sales pricing objective may be to _________, which will in turn lead to increases in market share and profit.

Accepted Answer

A)  decrease market share and invest in additional research and development of new products
B)  increase sales revenue while decreasing market share
C)  increase sales revenue
D)  increase research and development financing
E)  continue with previous policies that seem to be workingF) A) and B)
G) A) and C)

Question 17

FIGURE 12-7 
-Figure 12-7 above shows that by selling 800 pictures the firm will

Accepted Answer

A)  break even.
B)  incur a loss.
C)  earn a profit.
D)  have no fixed costs.
E)  have no variable costs.F) B) and C)
G) A) and D)

Question 18

The average price Washburn charges for a guitar is $349.This pricing level is most reflective of a(n)  _______ approach.

Accepted Answer

A)  skimming price
B)  penetration price
C)  prestige price
D)  odd-even pricing
E)  target priceF) A) and B)
G) A) and E)

Question 19

Mercedes-Benz cars and a Patek Phillipee's Platinum World Time wrist watch have a common characteristic - they have an element of _________.

Accepted Answer

A)  penetration pricing
B)  prestige pricing
C)  target pricing
D)  bundle pricing
E)  yield-management pricingF) A) and B)
G) B) and D)

Question 20

Price refers to

Accepted Answer

A)  the financial consequence of doing business.
B)  value judgments made by both the buyer and seller regarding an item's worth.
C)  the money or other considerations (including other goods and services)  exchanged for the ownership or use of a good or service.
D)  tangible or intangible remuneration for the use of a product or service.
E)  the highest monetary value a customer is willing to pay for a product or service.F) C) and D)
G) C) and E)

Exam 12: Pricing Products and Services

FIGURE 12-6 -A shift of the demand curve from D1 to D2 in Figure 12-6 above indicates

Correct Answer
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Price refers to

Correct Answer
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The ratio of perceived benefits to price is referred to as

Correct Answer
verified

Another name for a one-price policy is

Correct Answer
verified

Given that a firm's profit is high enough for it to remain in business, a sales pricing objective may be to _________, which will in turn lead to increases in market share and profit.

Correct Answer
verified

The average price Washburn charges for a guitar is $349.This pricing level is most reflective of a(n) _______ approach.

Correct Answer
verified

With a cost oriented pricing strategy, a price setter stress the __ side of the pricing problem and the price is set by looking at _.

Correct Answer
verified

Yield management pricing refers to

Correct Answer
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Correct Answer
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FIGURE 12-5 -Figure 12-5 above shows that when the price moves from $2.00 to $1.50 per unit, the quantity demanded increases from 3 million to 4.5 million.This is an example of a

Correct Answer
verified

Yield management pricing is most consistent with services trying to deal with

Correct Answer
verified

The practice of exchanging products and services for other products and services rather than for money is referred to as _________.

Correct Answer
verified

Reference value involves comparing the costs and benefits of _________.

Correct Answer
verified

Which of the following statements regarding pricing objectives is most accurate?

Correct Answer
verified

Mercedes-Benz cars and a Patek Phillipee's Platinum World Time wrist watch have a common characteristic - they have an element of _________.

Correct Answer
verified

Which of the following statements about the legal and regulatory aspect of pricing is most accurate?

Correct Answer
verified

FIGURE 12-7 -Figure 12-7 above shows that by selling 800 pictures the firm will

Correct Answer
verified

Washburn Guitars broke their guitars into four distinct market segments.Each segment would be priced accordingly.Their mass produced instruments were intended to appeal to

Correct Answer
verified

All things being equal, if a firm finds the demand for one of its products is inelastic, it can increase its total revenues by

Correct Answer
verified

Correct Answer
verified

Exam 12: Pricing Products and Services

FIGURE 12-6 -A shift of the demand curve from D1 to D2 in Figure 12-6 above indicates

Correct AnswerverifiedShow Answer

Price refers to

Correct AnswerverifiedShow Answer

The ratio of perceived benefits to price is referred to as

Correct AnswerverifiedShow Answer

Another name for a one-price policy is

Correct AnswerverifiedShow Answer

Given that a firm's profit is high enough for it to remain in business, a sales pricing objective may be to _________, which will in turn lead to increases in market share and profit.

Correct AnswerverifiedShow Answer

The average price Washburn charges for a guitar is $349.This pricing level is most reflective of a(n) _______ approach.

Correct AnswerverifiedShow Answer

With a cost oriented pricing strategy, a price setter stress the __________ side of the pricing problem and the price is set by looking at _________.

Correct AnswerverifiedShow Answer

Yield management pricing refers to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

FIGURE 12-5 -Figure 12-5 above shows that when the price moves from $2.00 to $1.50 per unit, the quantity demanded increases from 3 million to 4.5 million.This is an example of a

Correct AnswerverifiedShow Answer

Yield management pricing is most consistent with services trying to deal with

Correct AnswerverifiedShow Answer

The practice of exchanging products and services for other products and services rather than for money is referred to as _________.

Correct AnswerverifiedShow Answer

Reference value involves comparing the costs and benefits of _________.

Correct AnswerverifiedShow Answer

Which of the following statements regarding pricing objectives is most accurate?

Correct AnswerverifiedShow Answer

Mercedes-Benz cars and a Patek Phillipee's Platinum World Time wrist watch have a common characteristic - they have an element of _________.

Correct AnswerverifiedShow Answer

Which of the following statements about the legal and regulatory aspect of pricing is most accurate?

Correct AnswerverifiedShow Answer

FIGURE 12-7 -Figure 12-7 above shows that by selling 800 pictures the firm will

Correct AnswerverifiedShow Answer

Washburn Guitars broke their guitars into four distinct market segments.Each segment would be priced accordingly.Their mass produced instruments were intended to appeal to

Correct AnswerverifiedShow Answer

All things being equal, if a firm finds the demand for one of its products is inelastic, it can increase its total revenues by

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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With a cost oriented pricing strategy, a price setter stress the __ side of the pricing problem and the price is set by looking at _.

Correct Answer
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