Question 1

Why are price wars more common in oligopolies than in pure competition markets?

Accepted Answer

In oligopolies, there are only a few fir...

Question 2

Naomi tells her sales representatives the goal is to generate at least a 20 percent return on investment for all of the industrial building supplies they sell. Naomi is using a _______________ pricing strategy.

Accepted Answer

A)   sales orientation
B)   target profit
C)   target return
D)   status quo
E)   competitive parityF) B) and E)
G) A) and E)

Question 3

Cross-price elasticity is the

Accepted Answer

A)   percentage change in quantity of a product demanded divided by the percentage change in its price.
B)   percentage change in quantity demanded of product A compared to the percentage change in price of product B.
C)  change in price of product A divided by change in quantity demanded for product B.
D)  change in quantity of a product demanded divided by the change in its price.
E)  change in quantity of a product demanded divided by the change in its elasticity.F) D) and E)
G) A) and C)

Question 4

David manages a Shoney's restaurant. He is considering staying open later in the evening. For David, the variable costs associated with staying open longer hours will include all of the following EXCEPT

Accepted Answer

A)   ingredients used in preparing food.
B)   hours worked by cooks.
C)   rent on the restaurant building.
D)   energy costs.
E)   hours worked by the waiters and waitresses.F) C) and E)
G) A) and D)

Question 5

The point at which the number of units sold generates enough revenue to equal the total costs of running an operation is known as the

Accepted Answer

A)   contribution per unit.
B)   fixed cost margin.
C)   break-even point.
D)   unit cost.
E)   marginal revenue.F) A) and D)
G) C) and D)

Question 6

__________ price fixing occurs when competitors collude to control prices, and __________ price fixing occurs within a marketing channel to control prices passed on to consumers.

Accepted Answer

A)   Industry; supply chain
B)   General; specific
C)   Widespread; integrated
D)   Strategic; tactical
E)   Horizontal; verticalF) A) and E)
G) A) and B)

Question 7

In general, prices should not be based on costs because

Accepted Answer

A)   consumers are cost-conscious.
B)   producers rarely know what their costs are.
C)   consumers make their purchase decisions based on perceived value.
D)   producers need to avoid creating a cost competitive parity debate.
E)   customers are always right.F) A) and E)
G) A) and B)

Question 8

If a firm is engaged in monopolistic competition, it should seek a way to differentiate itself.

Accepted Answer

A) True 
 B)False

Question 9

Ryan gave the manager of his convenience store a set of binoculars so she could see the gasoline prices charged by the other convenience store at that intersection. Ryan told the manager to always match the gasoline prices of the other store. Ryan is using a _____________________ pricing strategy.

Accepted Answer

A)   maximizing profits
B)   target profit
C)   target return
D)   status quo
E)   salesF) C) and D)
G) A) and D)

Question 10

Bill desperately needed tires for his car, and he found an ad with an incredibly low price. When he got there, he found out that those had been sold out, and he was pressured into buying tires that were more expensive than he wanted. Bill found out later that Marcelo had had the same experience at the store a few weeks earlier. It's quite possible that both Bill and Marcelo had become the victim of a deceptive pricing tactic known as

Accepted Answer

A)   loss leader pricing.
B)   desperation selling.
C)   bait and switch.
D)   off-season deceptions.
E)   inventory reduction pricing.F) D) and E)
G) A) and B)

Question 11

Explain how the demand curve works and how it benefits a firm.

Accepted Answer

A demand curve shows how many units of a...

Question 12

Why is it more fun and challenging for a marketer to be part of a market characterized by monopolistic competition than be part of one characterized by pure competition?

Accepted Answer

In pure competition, all products are si...

Question 13

Traditional demand curve economic theory is used by marketers to understand _______________ in the five Cs of pricing.

Accepted Answer

A)   competitors
B)   channel members
C)   cost
D)   customers
E)   company objectivesF) D) and E)
G) B) and E)

Question 14

The observation that consumers are generally more sensitive to price increases than to price decreases suggests that

Accepted Answer

A)   most consumers cannot remember what price they paid the last time they bought a particular product.
B)   it is easier to lose customers with a price increase than to gain customers with a price decrease.
C)   most consumers would rather skip buying a product than pay a higher price.
D)   most consumers are emotionally attached to their favorite products and are unlikely to change, even if the price changes.
E)   firms gain more customers with price decreases than they lose with price increases.F) D) and E)
G) C) and D)

Question 15

Margaret has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host. Since she does not know much about wine, she will likely use the price of the wines as

Accepted Answer

A)   an indicator of quality.
B)   a reflection of status quo pricing.
C)   an indicator of the variety.
D)   a measure of scarcity.
E)   a measure of the income effect.F) C) and D)
G) A) and C)

Question 16

The demand curve for prestige products generally slopes downward due to higher prices.

Accepted Answer

A) True 
 B)False

Question 17

A _________________ strategy involves accurately measuring all the factors needed to predict sales and profits at various price levels, so that the price level that produces the highest return can be chosen.

Accepted Answer

A)   sales orientation
B)   target profit
C)   target return
D)   status quo
E)   maximizing profitsF) A) and C)
G) D) and E)

Question 18

The major objectives associated with a market penetration pricing strategy are to

Accepted Answer

A)   capture the high end of the market demand curve and lower introduction costs.
B)   quickly build sales and market share.
C)   minimize customer dissatisfaction and maximize reference price value.
D)   provide an incentive to purchase a less desirable product to obtain a more desirable product.
E)   match competitors' prices and communicate high quality.F) B) and E)
G) B) and D)

Question 19

The Robinson-Patman Act does NOT apply to end consumers, at which point many forms of price discrimination occur.

Accepted Answer

A) True 
 B)False

Question 20

Yurgen is opening a financial consulting service for high-income retirees in his area. This target market is used to paying for quality and associates high quality with high prices. Yurgen should probably NOT use a market penetration pricing strategy because

Accepted Answer

A)   he might be missing out on customers who would pay more for his products.
B)   there are moderate barriers to competitive entry in the market.
C)   a low price might signal low quality.
D)   he would have to determine zone pricing discounts.
E)   the experience curve effect would drop unit costs too rapidly.F) D) and E)
G) B) and D)

Exam 14: Pricing Concepts for Establishing Value

Correct Answer
verified

Ryan gave the manager of his convenience store a set of binoculars so she could see the gasoline prices charged by the other convenience store at that intersection. Ryan told the manager to always match the gasoline prices of the other store. Ryan is using a _____________________ pricing strategy.

Correct Answer
verified

Margaret has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host. Since she does not know much about wine, she will likely use the price of the wines as

Correct Answer
verified

The observation that consumers are generally more sensitive to price increases than to price decreases suggests that

Correct Answer
verified

A _________________ strategy involves accurately measuring all the factors needed to predict sales and profits at various price levels, so that the price level that produces the highest return can be chosen.

Correct Answer
verified

The major objectives associated with a market penetration pricing strategy are to

Correct Answer
verified

David manages a Shoney's restaurant. He is considering staying open later in the evening. For David, the variable costs associated with staying open longer hours will include all of the following EXCEPT

Correct Answer
verified

Explain how the demand curve works and how it benefits a firm.

Correct Answer
verified
A demand curve shows how many units of a...
View Answer

Naomi tells her sales representatives the goal is to generate at least a 20 percent return on investment for all of the industrial building supplies they sell. Naomi is using a _______________ pricing strategy.

Correct Answer
verified

The point at which the number of units sold generates enough revenue to equal the total costs of running an operation is known as the

Correct Answer
verified

Why is it more fun and challenging for a marketer to be part of a market characterized by monopolistic competition than be part of one characterized by pure competition?

Correct Answer
verified
In pure competition, all products are si...
View Answer

price fixing occurs when competitors collude to control prices, and price fixing occurs within a marketing channel to control prices passed on to consumers.

Correct Answer
verified

In general, prices should not be based on costs because

Correct Answer
verified

Traditional demand curve economic theory is used by marketers to understand _______________ in the five Cs of pricing.

Correct Answer
verified

If a firm is engaged in monopolistic competition, it should seek a way to differentiate itself.

Correct Answer
verified

Yurgen is opening a financial consulting service for high-income retirees in his area. This target market is used to paying for quality and associates high quality with high prices. Yurgen should probably NOT use a market penetration pricing strategy because

Correct Answer
verified

The Robinson-Patman Act does NOT apply to end consumers, at which point many forms of price discrimination occur.

Correct Answer
verified

Cross-price elasticity is the

Correct Answer
verified

Why are price wars more common in oligopolies than in pure competition markets?

Correct Answer
verified
In oligopolies, there are only a few fir...
View Answer

The demand curve for prestige products generally slopes downward due to higher prices.

Correct Answer
verified

Exam 14: Pricing Concepts for Establishing Value

Correct AnswerverifiedShow Answer

Ryan gave the manager of his convenience store a set of binoculars so she could see the gasoline prices charged by the other convenience store at that intersection. Ryan told the manager to always match the gasoline prices of the other store. Ryan is using a _____________________ pricing strategy.

Correct AnswerverifiedShow Answer

Margaret has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host. Since she does not know much about wine, she will likely use the price of the wines as

Correct AnswerverifiedShow Answer

The observation that consumers are generally more sensitive to price increases than to price decreases suggests that

Correct AnswerverifiedShow Answer

A _________________ strategy involves accurately measuring all the factors needed to predict sales and profits at various price levels, so that the price level that produces the highest return can be chosen.

Correct AnswerverifiedShow Answer

The major objectives associated with a market penetration pricing strategy are to

Correct AnswerverifiedShow Answer

David manages a Shoney's restaurant. He is considering staying open later in the evening. For David, the variable costs associated with staying open longer hours will include all of the following EXCEPT

Correct AnswerverifiedShow Answer

Explain how the demand curve works and how it benefits a firm.

Correct AnswerverifiedA demand curve shows how many units of a...View AnswerShow Answer

Naomi tells her sales representatives the goal is to generate at least a 20 percent return on investment for all of the industrial building supplies they sell. Naomi is using a _______________ pricing strategy.

Correct AnswerverifiedShow Answer

The point at which the number of units sold generates enough revenue to equal the total costs of running an operation is known as the

Correct AnswerverifiedShow Answer

Why is it more fun and challenging for a marketer to be part of a market characterized by monopolistic competition than be part of one characterized by pure competition?

Correct AnswerverifiedIn pure competition, all products are si...View AnswerShow Answer

__________ price fixing occurs when competitors collude to control prices, and __________ price fixing occurs within a marketing channel to control prices passed on to consumers.

Correct AnswerverifiedShow Answer

In general, prices should not be based on costs because

Correct AnswerverifiedShow Answer

Traditional demand curve economic theory is used by marketers to understand _______________ in the five Cs of pricing.

Correct AnswerverifiedShow Answer

If a firm is engaged in monopolistic competition, it should seek a way to differentiate itself.

Correct AnswerverifiedShow Answer

Yurgen is opening a financial consulting service for high-income retirees in his area. This target market is used to paying for quality and associates high quality with high prices. Yurgen should probably NOT use a market penetration pricing strategy because

Correct AnswerverifiedShow Answer

The Robinson-Patman Act does NOT apply to end consumers, at which point many forms of price discrimination occur.

Correct AnswerverifiedShow Answer

Cross-price elasticity is the

Correct AnswerverifiedShow Answer

Why are price wars more common in oligopolies than in pure competition markets?

Correct AnswerverifiedIn oligopolies, there are only a few fir...View AnswerShow Answer

The demand curve for prestige products generally slopes downward due to higher prices.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A demand curve shows how many units of a...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
In pure competition, all products are si...
View Answer

price fixing occurs when competitors collude to control prices, and price fixing occurs within a marketing channel to control prices passed on to consumers.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
In oligopolies, there are only a few fir...
View Answer

Correct Answer
verified