Question 1

Which of the following statements best defines dynamic pricing?

Accepted Answer

A)  It is the practice of marking up prices by 100 percent, or doubling the cost.
B)  It is a basic, long-term pricing framework that establishes the initial price for a product.
C)  It is the ability to change prices very quickly.
D)  It is the practice of charging a very low price for a product with the intent of driving competitors out of business.

Question 2

A _____ is a price reduction offered to buyers buying in multiple units or above a specified dollar amount.

Accepted Answer

A)  trade discount
B)  cash discount
C)  seasonal discount
D)  quantity discount

Question 3

_____ is a price tactic that charges freight costs from a given point, regardless of the city from which the goods are shipped.

Accepted Answer

A)  FOB origin pricing
B)  Zone pricing
C)  Uniform delivered pricing
D)  Basing-point pricing

Question 4

Which of the following statements is true of price lines?

Accepted Answer

A)  Buyers cannot be offered a wide variety of merchandise at each established price.
B)  Price lines enable a seller to reach several market segments.
C)  Firms have to carry a larger total inventory than it could without price lines.
D)  Price lines are advantageous when costs rise continually.

Question 5

The newly opened Stone Restaurant was unable to attract a lot of customers. Since the owner of the restaurant had to pay back the loan that he had taken to start the restaurant, he decided to offer a 20 percent discount on the entire menu on weekends. In this scenario, the owner's pricing objective is a(n)  _____.

Accepted Answer

A)  market share maximization objective
B)  profit maximization objective
C)  asset maximization objective
D)  sales maximization objective

Question 6

Because of its recent high growth in the national market, Mable Inc., an online cosmetics retailer, decides to divide its market in the United States into segments and charge a flat freight rate to all customers in a given segment. In this scenario, Mable Inc. plans to adopt freight absorption pricing.

Accepted Answer

A) True 
 B)False

Question 7

To consumers, value is based upon:

Accepted Answer

A)  the absolute monetary value of price.
B)  perceived satisfaction.
C)  ability to get a discount on a product.
D)  the steadiness of price over a period of time.

Question 8

During the maturity stage of a product life cycle, distribution channels become a significant cost factor.

Accepted Answer

A) True 
 B)False

Question 9

At a price of $2,000 per unit, the demand for Rancho 60 mountain bikes from Cloyd's Inc. is 300 units, which is same as the number of bikes manufactured every year. If the marketing managers at Cloyd's Inc. decide to sell each bike at a price lower than $2,000 per unit, _____.

Accepted Answer

A)  a shortage of bikes will be created
B)  the number of bikes produced will increase drastically
C)  an inelastic demand for the bikes will be created
D)  the demand for and the supply of the bikes will attain equilibrium

Question 10

A _____ is a price reduction offered to a consumer, an industrial user, or a marketing intermediary in return for prompt payment of a bill.

Accepted Answer

A)  cash discount
B)  quantity discount
C)  functional discount
D)  seasonal discount

Question 11

Unlike break-even pricing, markup pricing uses complicated concepts of cost.

Accepted Answer

A) True 
 B)False

Question 12

Explain the concept of price lining as a pricing tactic for fine-tuning the base price.

Accepted Answer

Answers will vary. When a seller establi...

Question 13

_____ is sometimes called a "market-plus" approach to pricing because it denotes a high price relative to the prices of competing products.

Accepted Answer

A)  Price skimming
B)  Price fixing
C)  Status quo pricing
D)  Bait-and-switch pricing

Question 14

Which of the following happens if demand is elastic?

Accepted Answer

A)  As price goes up, consumer demand changes.
B)  The competition between organizations reduces.
C)  Products will not have any substitutes.
D)  The purchasing power of the consumer decreases.

Question 15

When there are many substitutes available for a particular product, consumers:

Accepted Answer

A)  judge the quality of the substitute product based on the supply of each substitute.
B)  perceive individual products to have poor durability.
C)  can easily switch from one product to another.
D)  are sensitive to changes in the supply of substitute products that belong to new brands.

Question 16

Firms that indulge in price fixing:

Accepted Answer

A)  decide how much to charge for a product.
B)  undercut the price quoted by a seller to a buyer.
C)  charge different prices to different customers.
D)  do not sell to two or more different buyers.

Question 17

The marketing manager of Raven Golf Club finds that the club can increase its market share and become the industry leader if it slashes membership prices by 50 percent during the first quarter of the year. However, the club cannot achieve its target return on investment if it slashes its membership prices during a quarter. This conflict illustrates:

Accepted Answer

A)  the need to eliminate low-profit products.
B)  a lack of competition in the marketplace.
C)  how pricing operates in an ideal marketplace.
D)  the need for trade-offs in pricing objectives.

Question 18

Return on investment (ROI)  for a firm:

Accepted Answer

A)  is the margin of profit earned by the firm inclusive of the taxes payable by the firm.
B)  is its total assets multiplied by net profits after taxes.
C)  measures management's overall effectiveness in generating profits with the available assets.
D)  will be lower than the previous year if the firm performs better in the market.

Question 19

Price promotion alone always creates a low price image.

Accepted Answer

A) True 
 B)False

Question 20

Psychological pricing is marketing two or more products in a single package for a special price.

Accepted Answer

A) True 
 B)False

Exam 19: Pricing Concepts

Unlike break-even pricing, markup pricing uses complicated concepts of cost.

Correct Answer
verified

Which of the following statements is true of price lines?

Correct Answer
verified

_____ is sometimes called a "market-plus" approach to pricing because it denotes a high price relative to the prices of competing products.

Correct Answer
verified

Correct Answer
verified

During the maturity stage of a product life cycle, distribution channels become a significant cost factor.

Correct Answer
verified

To consumers, value is based upon:

Correct Answer
verified

Psychological pricing is marketing two or more products in a single package for a special price.

Correct Answer
verified

Price promotion alone always creates a low price image.

Correct Answer
verified

At a price of $2,000 per unit, the demand for Rancho 60 mountain bikes from Cloyd's Inc. is 300 units, which is same as the number of bikes manufactured every year. If the marketing managers at Cloyd's Inc. decide to sell each bike at a price lower than $2,000 per unit, _____.

Correct Answer
verified

_____ is a price tactic that charges freight costs from a given point, regardless of the city from which the goods are shipped.

Correct Answer
verified

A _____ is a price reduction offered to buyers buying in multiple units or above a specified dollar amount.

Correct Answer
verified

Which of the following statements best defines dynamic pricing?

Correct Answer
verified

A _____ is a price reduction offered to a consumer, an industrial user, or a marketing intermediary in return for prompt payment of a bill.

Correct Answer
verified

Firms that indulge in price fixing:

Correct Answer
verified

Correct Answer
verified

Explain the concept of price lining as a pricing tactic for fine-tuning the base price.

Correct Answer
verified
Answers will vary. When a seller establi...
View Answer

Which of the following happens if demand is elastic?

Correct Answer
verified

Correct Answer
verified

When there are many substitutes available for a particular product, consumers:

Correct Answer
verified

Return on investment (ROI) for a firm:

Correct Answer
verified

Exam 19: Pricing Concepts

Unlike break-even pricing, markup pricing uses complicated concepts of cost.

Correct AnswerverifiedShow Answer

Which of the following statements is true of price lines?

Correct AnswerverifiedShow Answer

_____ is sometimes called a "market-plus" approach to pricing because it denotes a high price relative to the prices of competing products.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

During the maturity stage of a product life cycle, distribution channels become a significant cost factor.

Correct AnswerverifiedShow Answer

To consumers, value is based upon:

Correct AnswerverifiedShow Answer

Psychological pricing is marketing two or more products in a single package for a special price.

Correct AnswerverifiedShow Answer

Price promotion alone always creates a low price image.

Correct AnswerverifiedShow Answer

At a price of $2,000 per unit, the demand for Rancho 60 mountain bikes from Cloyd's Inc. is 300 units, which is same as the number of bikes manufactured every year. If the marketing managers at Cloyd's Inc. decide to sell each bike at a price lower than $2,000 per unit, _____.

Correct AnswerverifiedShow Answer

_____ is a price tactic that charges freight costs from a given point, regardless of the city from which the goods are shipped.

Correct AnswerverifiedShow Answer

A _____ is a price reduction offered to buyers buying in multiple units or above a specified dollar amount.

Correct AnswerverifiedShow Answer

Which of the following statements best defines dynamic pricing?

Correct AnswerverifiedShow Answer

A _____ is a price reduction offered to a consumer, an industrial user, or a marketing intermediary in return for prompt payment of a bill.

Correct AnswerverifiedShow Answer

Firms that indulge in price fixing:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Explain the concept of price lining as a pricing tactic for fine-tuning the base price.

Correct AnswerverifiedAnswers will vary. When a seller establi...View AnswerShow Answer

Which of the following happens if demand is elastic?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When there are many substitutes available for a particular product, consumers:

Correct AnswerverifiedShow Answer

Return on investment (ROI) for a firm:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
verified
Answers will vary. When a seller establi...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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