Question 1

All of the following are alternate names for price except which?

Accepted Answer

A)  a premium
B)  barter
C)  tuition
D)  a commission
E)  profitF) C) and D)
G) All of the above

Question 2

Most consumers realize that the quality of diamonds varies,and most believe the higher the price of a diamond,the higher its quality.This is an example of price influencing the perception of overall quality and therefore ________ to consumers.

Accepted Answer

A)  acceptable cost
B)  perceptual investment
C)  barter potential
D)  return on investment
E)  valueF) C) and D)
G) A) and B)

Question 3

To increase value the most,marketers should

Accepted Answer

A)  decrease benefits.
B)  decrease benefits and increase price.
C)  decrease price and increase benefits.
D)  decrease price and decrease benefits.
E)  hold the price steady and let the perceived value of the item increase as it matures in its life cycle.F) B) and C)
G) A) and C)

Question 4

Three different objectives relate to a firm's profit,which is often measured in terms of return on investment.One objective,known as ________,occurs when a firm sets a profit goal,usually determined by its board of directors.

Accepted Answer

A)  maximizing current profit
B)  managing for long-run profits
C)  target return
D)  break-even strategy
E)  minimizing riskF) B) and E)
G) C) and D)

Question 5

All of the following are demand factors except which?

Accepted Answer

A)  the price of similar products
B)  consumer tastes
C)  consumer income
D)  the availability of similar products
E)  the form of promotionF) A) and E)
G) C) and D)

Question 6

In the purchase of the sugar substitute Splenda,you may compare it to something you know about like real sugar.Although Splenda is more expensive than sugar,it is purchased by many consumers because it contains no calories.This situation involves the consumer considering

Accepted Answer

A)  a marginal analysis.
B)  a profit equation.
C)  a break-even analysis.
D)  price elasticity of demand.
E)  a reference value.F) B) and E)
G) B) and D)

Question 7

General Motors and Chrysler experienced financial distress during the recession resulting in near bankruptcies fundamentally because

Accepted Answer

A)  the Asian markets such as China,India,and Japan entered the North American market and captured an even larger share.
B)  the value pricing strategy used by the "big three" was flawed and North Americans' perceptions of value had changed.
C)  they were continually using deceptive pricing when establishing the manufacturer's suggested retail price for their vehicles.
D)  their costs got out of control,causing their total costs to exceed their total revenues.
E)  their product line was not changing with the times in order to meet changing environmental standards regarding fuel economy and emissions.F) A) and B)
G) A) and C)

Question 8

Which of the following are elements involved in Step 1 of the price-setting process?

Accepted Answer

A)  objectives and constraints
B)  estimation of demand,sales revenue,and price elasticity
C)  cost estimation,marginal analysis,and break-even analysis
D)  demand for the product class and brand,newness of the product,and competition
E)  market segmentation targeting,and positioningF) A) and B)
G) A) and E)

Question 9

Inelastic demand exists when

Accepted Answer

A)  a small percentage decrease in price produces a smaller percentage increase in quantity demanded.
B)  a small percentage increase in price produces a larger percentage increase in quantity demanded.
C)  an increase in price is impossible due to government restrictions.
D)  the quantity demanded remains the same regardless of any changes in marketing strategies.
E)  a small percentage decrease in price produces a smaller percentage increase in quantity supplied.F) B) and D)
G) C) and E)

Question 10

Economists have identified four types of competitive markets,which are

Accepted Answer

A)  capitalistic,monopolistic,socialist,and communist.
B)  pure monopoly,monopolistic competition,oligopoly,and pure competition.
C)  free market,restrained market,government-regulated,and command economy.
D)  market economy,command economy,traditional economy,and controlled economy.
E)  open market,consumer-dominated market,service market,and product market.F) A) and B)
G) D) and E)

Question 11

The break-even point (BEP) = [Fixed cost ÷ (________ − Unit variable cost) ].

Accepted Answer

A)  Total cost
B)  Total expense
C)  Fixed cost
D)  Unit variable cost
E)  Unit priceF) B) and E)
G) A) and E)

Question 12

All of the following statements are true about an oligopolistic competitive market situation except which?

Accepted Answer

A)  The products can be differentiated or undifferentiated.
B)  Advertising that uses comparative (head-to-head) messages is the norm.
C)  The purpose of advertising is to inform.
D)  Sellers try to avoid price competition,which can lead to price wars.
E)  Firms in these markets stay aware of a competitor's price cuts or increases and may follow suit.F) A) and D)
G) A) and E)

Question 13

If a McDonald's menu board advertises Mini Meals under $3,McDonald's is most likely using which type of pricing strategy?

Accepted Answer

A)  predatory pricing
B)  value pricing
C)  loss-leader pricing
D)  odd-even pricing
E)  barterF) B) and E)
G) A) and D)

Question 14

Washburn Guitars markets its guitars to four distinct market segments.The firm's batch-custom instruments are targeted at

Accepted Answer

A)  first-time buyers.
B)  professional musicians.
C)  celebrities.
D)  large institutional buyers such as band programs.
E)  intermediate-skill players who may become professional musicians.F) A) and C)
G) D) and E)

Question 15

Which of the following are elements of determining cost,volume,and profit relationships in the price-setting process?

Accepted Answer

A)  objectives and constraints
B)  estimation of demand,sales revenue,and price elasticity
C)  cost estimation,marginal analysis,and break-even analysis
D)  demand for the product class and brand,newness of the product,and competition
E)  market segmentation targeting,and positioningF) All of the above
G) A) and E)

Question 16

Figure 13-7
 
-In the break-even chart in Figure 13-7 above,the triangular area GAF represents the firm's

Accepted Answer

A)  fixed costs.
B)  break-even point.
C)  variable costs.
D)  profit.
E)  total revenue.F) B) and D)
G) A) and E)

Question 17

Washburn Guitars markets its guitars to four distinct market segments.The firm's one-of-kind custom instruments are targeted at

Accepted Answer

A)  first-time buyers.
B)  professional musicians.
C)  stars and collectors.
D)  large institutional buyers such as high school and collegiate band programs.
E)  intermediate-skill players who may become professional musicians.F) A) and D)
G) A) and C)

Question 18

Apple's iPhone was originally a single model in a product line targeted at high-end users.However,lower-cost rival smartphones,many of which were powered by Google's Android operating system,soon entered the market.In dealing with competitive offerings,Apple faces

Accepted Answer

A)  the inability to change prices quickly.
B)  speeding up the diffusion of innovation process.
C)  brand extension confusion.
D)  charging a lower price to gain a foothold in the market.
E)  the challenge of pricing multiple products in an expanding product line.F) C) and D)
G) A) and E)

Question 19

Which of the following is a typical example of a fixed cost?

Accepted Answer

A)  taxes
B)  raw materials
C)  sales commissions
D)  building rental expense
E)  hourly wagesF) None of the above
G) A) and B)

Question 20

The competitive market situation in which the few sellers are sensitive to each other's prices is referred to as

Accepted Answer

A)  pure monopoly.
B)  oligopoly.
C)  monopolistic competition.
D)  pure competition.
E)  oligopolistic competition.F) A) and C)
G) D) and E)

Exam 13: Building the Price Foundation

General Motors and Chrysler experienced financial distress during the recession resulting in near bankruptcies fundamentally because

Correct AnswerverifiedShow Answer

Most consumers realize that the quality of diamonds varies,and most believe the higher the price of a diamond,the higher its quality.This is an example of price influencing the perception of overall quality and therefore ________ to consumers.

Correct AnswerverifiedShow Answer

Washburn Guitars markets its guitars to four distinct market segments.The firm's batch-custom instruments are targeted at

Correct AnswerverifiedShow Answer

Three different objectives relate to a firm's profit,which is often measured in terms of return on investment.One objective,known as ________,occurs when a firm sets a profit goal,usually determined by its board of directors.

Correct AnswerverifiedShow Answer

The break-even point (BEP) = [Fixed cost ÷ (________ − Unit variable cost) ].

Correct AnswerverifiedShow Answer

In the purchase of the sugar substitute Splenda,you may compare it to something you know about like real sugar.Although Splenda is more expensive than sugar,it is purchased by many consumers because it contains no calories.This situation involves the consumer considering

Correct AnswerverifiedShow Answer

Which of the following are elements involved in Step 1 of the price-setting process?

Correct AnswerverifiedShow Answer

Which of the following is a typical example of a fixed cost?

Correct AnswerverifiedShow Answer

All of the following are alternate names for price except which?

Correct AnswerverifiedShow Answer

Inelastic demand exists when

Correct AnswerverifiedShow Answer

To increase value the most,marketers should

Correct AnswerverifiedShow Answer

All of the following are demand factors except which?

Correct AnswerverifiedShow Answer

The competitive market situation in which the few sellers are sensitive to each other's prices is referred to as

Correct AnswerverifiedShow Answer

All of the following statements are true about an oligopolistic competitive market situation except which?

Correct AnswerverifiedShow Answer

Washburn Guitars markets its guitars to four distinct market segments.The firm's one-of-kind custom instruments are targeted at

Correct AnswerverifiedShow Answer

Apple's iPhone was originally a single model in a product line targeted at high-end users.However,lower-cost rival smartphones,many of which were powered by Google's Android operating system,soon entered the market.In dealing with competitive offerings,Apple faces

Correct AnswerverifiedShow Answer

Which of the following are elements of determining cost,volume,and profit relationships in the price-setting process?

Correct AnswerverifiedShow Answer

Figure 13-7 -In the break-even chart in Figure 13-7 above,the triangular area GAF represents the firm's

Correct AnswerverifiedShow Answer

If a McDonald's menu board advertises Mini Meals under $3,McDonald's is most likely using which type of pricing strategy?

Correct AnswerverifiedShow Answer

Economists have identified four types of competitive markets,which are

Correct AnswerverifiedShow Answer

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