question

Which of the following is a particular type of price?

answer

college tuition

question

The use of "special fees" and "surcharges" is driven by consumers' zeal for low prices and

answer

the ease of making price comparisons on the Internet

question

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

answer

incentives

question

Tara is enrolled for spring semester at college. The tuition is $6,000 but she has a scholarship for $1,000 as well as a work study grant of $1,500. The health fees and student activity fees are $150 for the semester. What is the actual price Tara is paying for the spring semester?

answer

$3,650

question

To calculate _________, you would compute: (Perceived benefits / Price).

answer

value

question

Which of the following statements is most accurate?

answer

For some products, price influences the perception of overall quality, and ultimately value, to consumers.

question

A firm's profit equation demonstrates that profit equals _________, or _________.

answer

Total revenue-Total cost; (Unit price x Quantity sold)-(Fixed cost + Variable cost)

question

Key to setting a final price for a product is to find an approximate price level to use as a reasonable starting point. Four common approaches to helping find this approximate price level are (1) demand oriented, (2) cost-oriented, (3) _________, and (4) competition-oriented approaches.

answer

Profit-oriented

question

Demand-oriented approaches weigh factors that underlie expected __________ more heavily than factors such as cost, profit, and competition when selecting a price level.

answer

customer tastes and preferences

question

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

answer

cost-plus pricing

question

Target profit pricing refers to

answer

setting an annual target of a specific dollar volume of profit

question

A skimming pricing policy is likely to be most effective when

answer

a high initial price will not attract competitors

question

A manufacturer using ________ is setting a high price so that quality-or status-conscious consumers will be attracted to the product and buy it.

answer

prestige pricing

question

A penetration pricing policy is likely to be most effective when (1) __________, (2) unit production and marketing costs fall dramatically as production volume increases, and (3) many segments of the market are price sensitive.

answer

a low initial price discourages competitors from entering the market

question

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

answer

cost-oriented

question

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

answer

bundle pricing

question

Airlines, hotels, and car rental firms engage in ____________ by varying prices based on time, day, week, or season to match demand and supply.

answer

yield management pricing

question

Which of the following companies would be most likely to use target return-on-investment pricing?

answer

an automobile manufacturer

question

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

answer

cost-plus pricing

question

Target profit pricing refers to

answer

setting an annual target of a specific dollar volume of profit.

question

Target return-on-investment (ROI) is frequently used by

answer

public utilities

question

Marketing executives must translate estimates of customer demand into estimates of

answer

revenues the firm expects to receive

question

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

answer

loss-leader pricing

question

Marketing executives must translate estimates of customer demand into estimates of

answer

revenues the firm expects to receive

question

Movement along the demand curve is illustrated by which of the following?

answer

As the price is lowered, the quantity demanded increases, assuming all else stays the same

question

A demand curve typically appears as

answer

a diagonal line going from top left to bottom right demonstrating that as price goes down, demand goes up.

question

At a price of $3 each, SHΛPE magazine sells 1.25 million copies of its magazine targeted to young women seeking a healthier lifestyle. If the price per issue is increased to $3.25 each, only 1 million copies will be sold. For the information provided, the price elasticity of demand for SHΛPE magazine in this price range can be described as

answer

elastic demand

question

Demand for a product is likely to be more price elastic if

answer

it has many substitutes.

question

Inelastic demand exists when a(n)

answer

a small increase or decrease in price will not significantly affect the demand, or units sold.

question

Total cost refers to

answer

the total expense incurred by a firm in producing and marketing a product; the sum of fixed cost and variable cost.

question

Demand factors refer to

answer

onsumers' willingness and ability to pay for goods and services.

question

A demand curve graph typically appears as

answer

a diagonal line going from top left to bottom right demonstrating that as price goes down, demand goes up.

question

The sum of the expenses of the firm that vary directly with the quantity of the product that is produced and sold is referred to as

answer

variable cost.

question

Fixed cost refers to

answer

the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold.

question

A technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output is referred to as _________.

answer

break-even analysis

question

Demand for a product is likely to be more price inelastic if

answer

it is considered a necessity.

question

You have been asked to calculate the break-even point for a new line of souvenir tee-shirts. The selling price will be $25 per shirt. The labor costs will be $5 per shirt. The administrative costs of operating the company are estimated to be $60,000 annually and the sales and marketing expenses are $20,000 a year. Additionally, the cost of materials will be $10 per shirt. What is the break-even quantity?

answer

8,000 shirts

question

Three different objectives relate to a firm's profit, which is often measured in terms of return on investment. These objectives have different implications for pricing strategy. The three objectives include a target return, maximizing current profit objectives, and _________.

answer

managing for long-run profits

question

Specifying the role of price in an organization's marketing and strategic plans is referred to as

answer

pricing objectives

question

Netflix used to charge $14.99 per month for its movie rental service. However when Blockbuster introduced the same service at $13.99, Netflix then dropped its price to $13.99. Netflix most likely made this price reduction in an attempt to

answer

maintain market share

question

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.

answer

market share

question

The ratio of the firm's sales revenues or unit sales to those of the industry (competitors plus the firm itself) is referred to as

answer

market share.

question

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

answer

pricing constraints

question

Three different objectives relate to a firm's profit, which is often measured in terms of return on investment. These objectives have different implications for pricing strategy. The three objectives include a target return, maximizing current profit objectives, and _________.

answer

managing for long-run profits

question

A conspiracy among firms to set prices for a product is referred to as

answer

price fixing.

question

Four pricing practices are closely scrutinized because of potential unethical or illegal actions. They include (1) price fixing, (2) price discrimination, (3) predatory pricing, and (4) _________.

answer

deceptive pricing

question

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.

answer

increase sales revenue

question

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

answer

negotiating the price

question

The practice of changing a very low price for a product with the intent of driving competitors out of business is referred to as

answer

predatory pricing.

question

The three major types of special adjustments to list or quoted price are

answer

discounts, allowances, and geographical adjustments.

question

The four major types of price discounts are

answer

quantity, seasonal, trade (functional), and cash.

question

Which of the following statements about a flexible-price policy is most accurate?

answer

When using a flexible-price policy, the seller may risk violating the Robinson-Patman Act.

question

Functional discounts are offered to resellers in the marketing channel on the basis of where they are in the channel and

answer

the marketing activities they are expected to perform in the future

question

To encourage retailers to pay their bills quickly, manufacturers offer them

answer

cash discounts

question

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

answer

negotiating the price

question

Functional discounts are offered to resellers in the marketing channel on the basis of where they are in the channel and

answer

the marketing activities they are expected to perform in the future.

question

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

answer

he percentage discounted if the bill is paid within 10 days.

question

Geographical adjustments are made by manufacturers or even wholesalers to list or quoted prices to reflect

answer

the cost of transportation of the products from seller to buyer.

question

A new car dealer can offer a reduction in the list price of a new Ford pickup truck by offering you a __________ of $1,000 for your 1998 Nissan

answer

trade-in allowance

question

The four major types of price discounts are

answer

quantity, seasonal, trade (functional), and cash.

question

Washburn sell their guitars through a number of channels such as chains and online dealers, but they feel it is their independent dealers who sell the guitar for them. In recognition of their hard work, Washburn takes a smaller profit margin from them because they have to do more work. In essence, this special adjustment to the list price or quoted price is an example of a(n)

answer

Trade discount.

question

The two general methods for quoting prices related to transportation costs are uniformed delivered pricing and _____________.

answer

FOB origin pricing

question

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

answer

the percentage discounted if the bill is paid within 10 days.

question

A new car dealer can offer a reduction in the list price of a new Ford pickup truck by offering you a __________ of $1,000 for your 1998 Nissan.

answer

trade-in allowance

question

North America's fastest-growing HDTV and consumer electronics company is

answer

vizio

question

In order to deliver a product that the average consumer could afford, Vizio used the strategy of

answer

having the product design and marketing done in the United States and having contract manufacturers in Taiwan, build the product.

question

A buying situation can involve comparing the costs and benefits of substitute items—such as real sugar to the sugar substitute Equal which, although more expensive than sugar, is purchased by many consumers because it contains no calories. This situation involves the consumer considering

answer

a reference value.

question

Which of the following statements is most accurate?

answer

For some products, price influences the perception of overall quality, and ultimately value, to consumers.

question

Key to setting a final price for a product is to find an approximate price level to use as a reasonable starting point. Four common approaches to helping find this approximate price level are (1) demand oriented, (2) cost-oriented, (3) _________, and (4) competition-oriented approaches.

answer

Profit-oriented

question

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

answer

Penetration pricing

question

Setting prices a few dollars or cents under an even number is referred to as _________.

answer

odd-even pricing

question

which of the following companies would be most likely to use target return-on-investment pricing?

answer

an automobile manufacturer

question

Setting a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors is referred to a _________.

answer

customary pricing

question

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

answer

loss-leader pricing

question

The maximum quantity of products consumers will buy at a given price is shown by

answer

a demand curve

question

When estimating demand, price is not the only factor to be considered. Three other elements include consumer tastes, price and availability of similar products, and

answer

consumer income

question

Target return-on-investment (ROI) is frequently used by

answer

public utilities

question

A demand curve typically appears as

answer

diagonal line going from top left to bottom right demonstrating that as price goes down, demand goes up.

question

Movement along the demand curve is illustrated by which of the following?

answer

As the price is lowered, the quantity demanded increases, assuming all else stays the same

question

Demand for a product is likely to be more price elastic if

answer

it has many substitutes.

question

Elastic demand exists when a(n)

answer

a small percentage decrease in price produces a larger percentage increase in quantity demanded and total revenue increases.

question

Inelastic demand exists when a(n)

answer

a small increase or decrease in price will not significantly affect the demand, or units sold.

question

Demand for a product is likely to be more price inelastic if

answer

it is considered a necessity.

question

Total revenue refers to

answer

the total money received from the sale of a product

question

Total cost refers to

answer

the sum of the expenses of the firm deducted from the revenue generated by the sale of the product the total expense incurred by a firm in producing and marketing a product; the sum of fixed cost and variable cost.

question

A demand curve graph typically appears as

answer

a diagonal line going from top left to bottom right demonstrating that as price goes down,

question

The sum of the expenses of the firm that vary directly with the quantity of the product that is produced and sold is referred to as

answer

variable cost.

question

Fixed cost refers to

answer

the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold.

question

Unit variable cost refers to

answer

variable cost expressed on a per unit basis for a product.

question

General Motors, Ford, and Chrysler have all recently experienced financial distress because

answer

their costs got out of control, causing their total costs to exceed their total revenues.

question

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

answer

break-even point

question

Specifying the role of price in an organization's marketing and strategic plans is referred to as

answer

pricing objectives

question

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

answer

Pricing objectives may change depending on the financial position of the company, the segments in which it does business, including the country in which the product is sold

question

Demand factors refer to

answer

consumers' willingness and ability to pay for goods and services

question

A technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output is referred to as _________.

answer

break-even analysis

question

Three different objectives relate to a firm's profit, which is often measured in terms of return on investment. These objectives have different implications for pricing strategy. The three objectives include a target return, maximizing current profit objectives, and _________.

answer

managing for long-run profits

question

The ratio of the firm's sales revenues or unit sales to those of the industry (competitors plus the firm itself) is referred to as

answer

market share.

question

Controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price are referred to as

answer

vertical price fixing.

question

An analysis of a prospective product shows it is expected to grow by at least 10 percent each year over the next 5 years, and then enter the maturity phase of its product life cycle. This type of analysis would provide useful information in which stage of the price-setting process?

answer

identifying pricing objectives and constraints

question

Specifying the role of price in an organization's marketing and strategic plans is referred to as

answer

pricing objectives

question

Four pricing practices are closely scrutinized because of potential unethical or illegal actions. They include (1) price fixing, (2) price discrimination, (3) predatory pricing, and (4) _________.

answer

Deceptive pricing

question

A conspiracy among firms to set prices for a product is referred to as

answer

price fixing.

question

Price fixing is illegal under per se under the

answer

Sherman Act..

question

Controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price are referred to as

answer

verticle pricing fixing

question

Price discrimination is illegal under the

answer

Robinson-Patman Act

question

Deceptive pricing is outlawed by the

answer

Federal Trade Commission

question

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

answer

negotiating the price

question

Reductions in unit costs for a larger order are referred to as

answer

quantity discounts.

question

The practice of changing a very low price for a product with the intent of driving competitors out of business is referred to as

answer

predatory pricing.

question

The three major types of special adjustments to list or quoted price are

answer

discounts, allowances, and geographical adjustments.

question

The four major types of price discounts are

answer

quantity, seasonal, trade (functional), and cash.

question

Which of the following statements about a flexible-price policy is most accurate?

answer

When using a flexible-price policy, the seller may risk violating the Robinson-Patman Act.

question

To reward wholesalers and retailers for the risk they accept in assuming increased inventory carrying costs, manufacturers offer

answer

seasonal discount

question

Setting different prices for products and services depending on individual buyers and purchase situations is referred to as

answer

a flexible-price policy

question

A new car dealer can offer a reduction in the list price of a new Ford pickup truck by offering you a __________ of $1,000 for your 1998 Nissan.

answer

trade-in allowance

question

Which of the following statements about a flexible-price policy is most accurate?

answer

When using a flexible-price policy, the seller may risk violating the Robinson-Patman Act.

question

What is it called when a manufacturer offers discounts to resellers in the marketing channel on the basis of where they are in the channel?

answer

trade discounts

question

Reductions from the list price that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller is called

answer

discounts

question

What is it called when a manufacturer offers discounts to resellers in the marketing channel on the basis of where they are in the channel?

answer

trade discounts

question

Functional discounts are offered to resellers in the marketing channel on the basis of where they are in the channel and

answer

the marketing activities they are expected to perform in the future.

question

To encourage retailer to pay their bills quickly, manufactures offer them

answer

cash discounts

question

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

answer

the percentage discounted if the bill is paid within 10 days.

question

A new car dealer can offer a reduction in the list price of a new Ford pickup truck by offering you a __________ of $1,000 for your 1998 Nissan.

answer

trade-in allowance

question

Geographical adjustments are made by manufacturers or even wholesalers to list or quoted prices to reflect

answer

the cost of transportation of the products from seller to buyer.

question

The two general methods for quoting prices related to transportation costs are uniformed delivered pricing and _____________.

answer

FOB origin pricing

question

Central Ice Machine Company located in Omaha, Nebraska and sells Frick, Sullair, York, and Fes Fuller ammonia refrigeration parts. The company ships using FOB origin pricing. Which of the following statements about the shipment of a Frick reciprocating compressor is true?

answer

A buyer in Albany, New York, will pay significantly more shipping charges than a buyer in Lincoln, Nebraska, and Central Ice Machine will pay none.

question

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

answer

uniform delivered pricing

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