Question 1

Setting prices for business customers is very similar to setting prices for consumers.

Accepted Answer

A) True 
 B)False

Question 2

The types of prices that appear most often in ads are ___,while the types of prices that occur least often in ads are ____ prices.

Accepted Answer

A)   reference; comparison
B)   discount; cost-plus
C)   bargain; premium
D)   comparison; cost-plus
E)   sale; referenceF) C) and E)
G) B) and E)

Question 3

Barter is the oldest form of exchange.

Accepted Answer

A) True 
 B)False

Question 4

A firm can survive in the long run only if its products are sold below cost.

Accepted Answer

A) True 
 B)False

Question 5

Vanessa is shopping for a new pair of athletic shoes. Since she is concerned about both the price and the quality aspects of a product, Vanessa is most likely a ___ consumer.

Accepted Answer

A)   price-conscious
B)   prestige-sensitive
C)   value-conscious
D)   price-conscious and prestige-sensitive
E)   quality-consciousF) All of the above
G) B) and D)

Question 6

If Ralph Lauren offers to reduce the price of its women's blazers when retailers buy more than 100 pieces, the designer is offering a ____ discount.

Accepted Answer

A)   quantity
B)   cash
C)   seasonal
D)   trade
E)   complementaryF) B) and D)
G) A) and C)

Question 7

The purpose of the pricing concept is to quantify and express the value of items in a market exchange.

Accepted Answer

A) True 
 B)False

Question 8

Laura Spangler, of North Central Novelties, reduces the price of games sold to Robertson's Entertainment by 10% to allow for expenses associated with Robertson's promoting the games to consumers. This is an example of a ____ discount.

Accepted Answer

A)   quantity
B)   cash
C)   seasonal
D)   trade
E)   complementaryF) D) and E)
G) C) and D)

Question 9

At what point does a firm maximize profit?

Accepted Answer

A)   The point at which marginal cost equals marginal revenue
B)   The point at which the firm sells its product at the highest price
C)   The breakeven point plus the adjusted marginal cost
D)   The point at which marginal profits equal marginal revenue
E)   The point at which marginal cost equals marginal profitsF) C) and E)
G) A) and D)

Question 10

If Pacific Power and Light increased its rates by 10% and experienced a 2% reduction in the demand for power, the demand would be

Accepted Answer

A)   elastic.
B)   minimal.
C)   minor elasticity.
D)   variable.
E)   inelastic.F) C) and E)
G) None of the above

Question 11

To gain market share, when Hyundai first entered the U.S. car market it did so with a comparatively low pricing strategy. One of the negative side effects of making this pricing decision is

Accepted Answer

A)   a negative impact on consumers' perceptions of quality.
B)   difficulty lowering the prices later.
C)   a high return on investment level affecting tax balances owed.
D)   poor survival chances.
E)   higher developmental costs.F) B) and D)
G) C) and D)

Question 12

For most products, a(n)  ____ relationship exists between the price of a particular product and the quantity demanded.

Accepted Answer

A)   inelastic
B)   inverse
C)   positive
D)   unknown
E)   elasticF) D) and E)
G) A) and C)

Question 13

At the breakeven point,

Accepted Answer

A)   the money a company brings in from selling products equals the amount spent producing the products.
B)   the total fixed costs are exactly equal to the total variable costs.
C)   profits are exactly equal to the difference between revenue and total variable costs.
D)   the marginal revenue of a product is exactly equal to the marginal cost of producing one more unit.
E)   the marginal cost curve and the average cost curve will be identical for a particular product.F) A) and C)
G) A) and D)

Question 14

Channel member expectations play no part in a firm's pricing decisions.

Accepted Answer

A) True 
 B)False

Question 15

Mars Petcare is one of the world's largest pet food manufacturers. If the strategic goal for Mars Petcare in the coming year was to ___________ in North America, it should use temporary price reductions.

Accepted Answer

A)   increase the number of competitors
B)   gain market share
C)   decrease volume sold
D)   increase revenue per item
E)   decrease the number of competitorsF) C) and E)
G) D) and E)

Question 16

Marginal revenue is the change in total revenue that occurs when a firm sells an additional unit of product.

Accepted Answer

A) True 
 B)False

Question 17

Sellers that emphasize distinctive product features to encourage brand preferences among customers are practicing

Accepted Answer

A)   product competition.
B)   nonprice competition.
C)   brand differentiation.
D)   price competition.
E)   competitor differentiation.F) B) and E)
G) A) and B)

Question 18

Brand uniqueness is not important in nonprice competition.

Accepted Answer

A) True 
 B)False

Question 19

The legality of uniform geographic pricing has been challenged, and so its use has been abandoned.

Accepted Answer

A) True 
 B)False

Question 20

Compare and contrast price and nonprice competition. Give examples of firms that compete on a price basis and on a nonprice basis.

Accepted Answer

When engaging in price competition, a ma...

Exam 19: Pricing Concepts

Barter is the oldest form of exchange.

Correct AnswerverifiedShow Answer

Sellers that emphasize distinctive product features to encourage brand preferences among customers are practicing

Correct AnswerverifiedShow Answer

Mars Petcare is one of the world's largest pet food manufacturers. If the strategic goal for Mars Petcare in the coming year was to ___________ in North America, it should use temporary price reductions.

Correct AnswerverifiedShow Answer

A firm can survive in the long run only if its products are sold below cost.

Correct AnswerverifiedShow Answer

The legality of uniform geographic pricing has been challenged, and so its use has been abandoned.

Correct AnswerverifiedShow Answer

Brand uniqueness is not important in nonprice competition.

Correct AnswerverifiedShow Answer

Vanessa is shopping for a new pair of athletic shoes. Since she is concerned about both the price and the quality aspects of a product, Vanessa is most likely a ___ consumer.

Correct AnswerverifiedShow Answer

Channel member expectations play no part in a firm's pricing decisions.

Correct AnswerverifiedShow Answer

For most products, a(n) ____ relationship exists between the price of a particular product and the quantity demanded.

Correct AnswerverifiedShow Answer

Compare and contrast price and nonprice competition. Give examples of firms that compete on a price basis and on a nonprice basis.

Correct AnswerverifiedWhen engaging in price competition, a ma...View AnswerShow Answer

Setting prices for business customers is very similar to setting prices for consumers.

Correct AnswerverifiedShow Answer

Laura Spangler, of North Central Novelties, reduces the price of games sold to Robertson's Entertainment by 10% to allow for expenses associated with Robertson's promoting the games to consumers. This is an example of a ____ discount.

Correct AnswerverifiedShow Answer

To gain market share, when Hyundai first entered the U.S. car market it did so with a comparatively low pricing strategy. One of the negative side effects of making this pricing decision is

Correct AnswerverifiedShow Answer

At what point does a firm maximize profit?

Correct AnswerverifiedShow Answer

The purpose of the pricing concept is to quantify and express the value of items in a market exchange.

Correct AnswerverifiedShow Answer

If Pacific Power and Light increased its rates by 10% and experienced a 2% reduction in the demand for power, the demand would be

Correct AnswerverifiedShow Answer

At the breakeven point,

Correct AnswerverifiedShow Answer

The types of prices that appear most often in ads are ___,while the types of prices that occur least often in ads are ____ prices.

Correct AnswerverifiedShow Answer

If Ralph Lauren offers to reduce the price of its women's blazers when retailers buy more than 100 pieces, the designer is offering a ____ discount.

Correct AnswerverifiedShow Answer

Marginal revenue is the change in total revenue that occurs when a firm sells an additional unit of product.

Correct AnswerverifiedShow Answer

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When engaging in price competition, a ma...
View Answer

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The types of prices that appear most often in ads are _,while the types of prices that occur least often in ads are __ prices.

Correct Answer
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