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Exam 13: Pricing Products and Services

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Question 61

Multiple Choice

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When buyers and sellers are separated by vast distances, geographical adjustments may be made to reflect the cost of transportation of the products from sellers to buyers. Which method of quoting prices would be chosen by a seller who wants to maximize profits?

A) single-zone pricing
B) multiple-zone pricing
C) FOB origin pricing
D) uniform delivered pricing

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Question 62

Multiple Choice

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When General Mills divides the sales revenue in a single year obtained by all its breakfast cereals by the breakfast cereal sales of all its competitors plus its own for that same year, it is calculating its:

A) market share.
B) current profit.
C) unit volume.
D) long-run profit.

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Question 63

Multiple Choice

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When it comes to low prices in the eyes of consumers, which of the following statements is TRUE?

The price equation formula is price equals list price minus incentives and allowances plus:

Imagine you have some extra cash and would like to invest in something that will give you some extra money while you look for a job after graduation. If you invest $177 in a black-pawed Zip (a cat) Beanie Baby, you should remember that its price is most closely tied to:

The pricing model in the text has six distinct steps in the pricing process. In the third step a firm would:

The Swedish manufacturer of Asko dishwashers concluded that consumers would be willing to pay approximately $989 for a dishwasher that was quieter than any other machine on the market. Based on this price, Asko determined the margins that would have to be allowed for wholesalers and retailers to give the $989 retail price. Asko used:

Odd-even pricing is most closely related to:

Which of the following would be an example of a fixed cost for a company that makes carbon monoxide monitoring systems for employees to wear that work in hazardous areas?

Montreal bases Yellow Pages Group, publisher of the Yellow Pages, suggests that for every dollar an advertiser invests in the Yellow Pages, this will return to them on average twenty-six dollars in sales. The Yellow pages, however suggests that different categories will have higher returns. Based on this they will charge according to the category. What pricing policy is the Yellow Pages following?

If you were to buy five dwarf peach trees from the Stark Bro's fruit trees and landscaping catalogue 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 Bro's uses:

A hardware store advertises a 3/8" Black & Decker power drill for $29.95. You enter the store intending to purchase the drill. The salesperson informs you that they are all sold out. She tells you that the "sale" drills were factory seconds and that if you are going to be doing any kind of serious woodworking, you should buy the Model 3309, which sells for $49.99. This scenario has elements of which type of deceptive pricing?

The pricing model in the text has six distinct steps in the pricing process. In the first step a firm would:

A custom kitchen cabinet storeowner wishes to use target profit pricing to establish a price for a typical section of cabinets. Assume variable cost is $200 per unit, fixed cost is $44,000, and a target profit of $10,000 on a volume of 400 cabinets is desired. What should be charged for a typical cabinet section?

Many online items, such as games, downloadable software, and services (such as Dropbox) , provide basic versions for free, although they have limited features and support. To get 24/7 support and all the features unlocked, the consumer must purchase the item. This strategy is referred to as:

From a marketing viewpoint, price is__________ exchanged for the ownership or use of a good or service.

Which product is likely to experience skimming pricing?

Two individuals at a spice market in Marrakesh swap cinnamon in exchange for saffron, where both sides are equally happy with the arrangement. This occurred rather than exchanging:

Each of the following is a true statement with respect to acting as a constraint on pricing EXCEPT:

A convention hall has a standard rate of $500.00 an evening as a rental fee. However, during key holidays of the year (such as New Year's Eve) , the rental fee per evening is $1,250.00. This is an example of: