Question 1

A Patek Philippe Sky Moon Tourbillion men's wristwatch is among the most expensive in the world, costing over $1.75 million. This is an example of a __________ strategy.

Accepted Answer

A)  penetration pricing
B)  target pricing
C)  bundle pricing
D)  loss leader pricing
E)  prestige pricing

Question 2

If a firm finds the demand for one of its products is inelastic, it can increase its total revenues by

Accepted Answer

A)  lowering its price.
B)  increasing fixed costs only.
C)  increasing variable costs only.
D)  increasing both fixed and variable costs.
E)  raising its price

Question 3

How do consumers use price in their assessments of value?

Accepted Answer

From a consumer's standpoint, price is o...

Question 4

A flexible-price policy refers to

Accepted Answer

A)  setting the price of a line of products at a number of different specific pricing points.
B)  setting the prices for all items in a product line to cover the total cost and produce a profit for the complete line, not necessarily for each item.
C)  deliberately selling a product below its customary price, not to increase sales, but to attract customers' attention in hopes that they will buy other products as well.
D)  setting different prices for products and services depending on individual buyers and purchase situations.
E)  adding a fixed percentage to the cost of all items in a specific product class.

Question 5

Four pricing practices are closely scrutinized because of potential unethical or illegal actions. They include: (1)  predatory pricing; (2)  price discrimination; (3)  deceptive pricing; and (4)  __________.

Accepted Answer

A)  price discounting
B)  flexible pricing
C)  price fixing
D)  delayed payment penalties
E)  price elasticity

Question 6

Prestige pricing is considered to be a __________ approach to pricing.

Accepted Answer

A)  demand-oriented
B)  cost-oriented
C)  profit-oriented
D)  competition-oriented
E)  service-oriented

Question 7

Which term describes factors that limit the range of prices a firm may set?

Accepted Answer

A)  price fixings
B)  pricing constraints
C)  price elasticities
D)  pricing demands
E)  pricing margins

Question 8

Setting an annual target of a specific dollar volume of profit is referred to as __________.

Accepted Answer

A)  target profit pricing
B)  target return-on-investment pricing
C)  loss leader pricing
D)  at-, above-, or below-market pricing
E)  yield management pricing

Question 9

Summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price is referred to as __________.

Accepted Answer

A)  standard markup pricing
B)  experience curve pricing
C)  cost-plus pricing
D)  product-line pricing
E)  target return-on-investment pricing

Question 10

What pricing method is often used because of the difficulty in establishing a benchmark of sales or investment to show how much of a firm's effort is needed to achieve the target?

Accepted Answer

A)  target return-on-investment pricing
B)  target return-on-sales pricing
C)  standard markup pricing
D)  target pricing
E)  loss-leader pricing

Question 11

When buying a car, __________ may result in discriminatory practices.

Accepted Answer

A)  dual pricing
B)  a one-price policy
C)  a flexible-price policy
D)  target return-on-sales pricing
E)  no-haggle pricing

Question 12

-Figure 11-2 above represents the four approaches to selecting an appropriate price level. Box C includes target profit and target return on sales so it represents which approach?

Accepted Answer

A)  demand-oriented approach
B)  profit-oriented approach
C)  competition-oriented approach
D)  cost-oriented approach
E)  results-oriented approach

Question 13

-Jane Westerlund owns a picture frame store and has generated a spreadsheet of several calculations based on different quantity, price, revenue, cost, and profit scenarios shown in Figure 11-5 above. What is the break-even point quantity for her picture frame store?

Accepted Answer

A)  0
B)  400
C)  800
D)  1,200
E)  2,000

Question 14

Suppose you are the owner of a picture frame store and you wish to calculate how many pictures you must sell to cover your fixed and variable costs at a given price. Let's assume that the demand for your pictures is strong, so the average price customers are willing to pay for each picture frame is $120. Also, suppose your fixed costs (FC)  total $32,000 (real estate taxes, interest on a bank loan, etc.)  and unit variable cost (UVC)  for a picture frame is $40 (labor, glass, frame, and matting) . If your picture frame store sold 2,000 picture frames, what would your profit or loss be?

Accepted Answer

A)  a loss of $32,000
B)  $0 - just able to break-even
C)  $32,000 profit
D)  $112,000 profit
E)  $128,000 profit

Question 15

According to the textbook, clothing manufacturer Hart Schaffner & Marx and retailer Bloomingdale's use __________ pricing.

Accepted Answer

A)  above-market
B)  at-market
C)  below-market
D)  prestige
E)  everyday low

Question 16

The formula, Total revenue - Total cost or [(Unit price × Quantity sold)  - (Fixed cost + Variable cost) ] represents __________.

Accepted Answer

A)  the value equation
B)  the sales ratio
C)  average revenue
D)  the break-even point
E)  the profit equation

Question 17

While pricing objectives frequently reflect corporate goals, pricing constraints often relate to

Accepted Answer

A)  stockholder demands.
B)  political ideology.
C)  conditions existing in the marketplace.
D)  an organization's code of ethics.
E)  the financial realities within the organization itself.

Question 18

Which of the following statements regarding pricing constraints is most accurate?

Accepted Answer

A)  When a product is in the introductory stage of the product life cycle, there is very little latitude in setting the initial price since consumers still don't know what the product can really do.
B)  A company has more latitude in setting an initial price if the product is in the introductory stage of its life cycle.
C)  The greater the number of products in a company's product line, the less the product features of similar products can affect price.
D)  The newest addition to a company's product line should always have the highest price in order to maintain the value of existing brands.
E)  To avoid cannibalization, the newest product addition to a company's product line should never have a price lower than the other offerings in the line

Question 19

Several companies produce latex gloves that are used in a variety of different industries. If one of the glove manufacturers decreases its price by just a few percentage points, it will result in a significant increase in quantity demanded. The demand for latex gloves is

Accepted Answer

A)  synergistic.
B)  inelastic.
C)  unitary.
D)  elastic.
E)  static.

Question 20

Which of the following statements about penetration pricing is most accurate?

Accepted Answer

A)  Penetration pricing is a profit-oriented approach to pricing.
B)  Penetration pricing is a cost-oriented pricing method.
C)  Penetration pricing encourages competitors to enter a market.
D)  Penetration pricing is more effective in a marketplace with price-sensitive consumers.
E)  Penetration pricing usually precedes a skimming pricing.

Exam 11: Pricing Products and Services

Prestige pricing is considered to be a __________ approach to pricing.

Correct Answer
verified

If a firm finds the demand for one of its products is inelastic, it can increase its total revenues by

Correct Answer
verified

Setting an annual target of a specific dollar volume of profit is referred to as __________.

Correct Answer
verified

Several companies produce latex gloves that are used in a variety of different industries. If one of the glove manufacturers decreases its price by just a few percentage points, it will result in a significant increase in quantity demanded. The demand for latex gloves is

Correct Answer
verified

Summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price is referred to as __________.

Correct Answer
verified

What pricing method is often used because of the difficulty in establishing a benchmark of sales or investment to show how much of a firm's effort is needed to achieve the target?

Correct Answer
verified

How do consumers use price in their assessments of value?

Correct Answer
verified
From a consumer's standpoint, price is o...
View Answer

According to the textbook, clothing manufacturer Hart Schaffner & Marx and retailer Bloomingdale's use __________ pricing.

Correct Answer
verified

A Patek Philippe Sky Moon Tourbillion men's wristwatch is among the most expensive in the world, costing over $1.75 million. This is an example of a __________ strategy.

Correct Answer
verified

Which of the following statements regarding pricing constraints is most accurate?

Correct Answer
verified

While pricing objectives frequently reflect corporate goals, pricing constraints often relate to

Correct Answer
verified

When buying a car, __________ may result in discriminatory practices.

Correct Answer
verified

Which of the following statements about penetration pricing is most accurate?

Correct Answer
verified

-Jane Westerlund owns a picture frame store and has generated a spreadsheet of several calculations based on different quantity, price, revenue, cost, and profit scenarios shown in Figure 11-5 above. What is the break-even point quantity for her picture frame store?

Correct Answer
verified

Correct Answer
verified

The formula, Total revenue - Total cost or [(Unit price × Quantity sold) - (Fixed cost + Variable cost) ] represents __________.

Correct Answer
verified

Four pricing practices are closely scrutinized because of potential unethical or illegal actions. They include: (1) predatory pricing; (2) price discrimination; (3) deceptive pricing; and (4) __________.

Correct Answer
verified

Which term describes factors that limit the range of prices a firm may set?

Correct Answer
verified

-Figure 11-2 above represents the four approaches to selecting an appropriate price level. Box C includes target profit and target return on sales so it represents which approach?

Correct Answer
verified

A flexible-price policy refers to

Correct Answer
verified

Exam 11: Pricing Products and Services

Prestige pricing is considered to be a __________ approach to pricing.

Correct AnswerverifiedShow Answer

If a firm finds the demand for one of its products is inelastic, it can increase its total revenues by

Correct AnswerverifiedShow Answer

Setting an annual target of a specific dollar volume of profit is referred to as __________.

Correct AnswerverifiedShow Answer

Several companies produce latex gloves that are used in a variety of different industries. If one of the glove manufacturers decreases its price by just a few percentage points, it will result in a significant increase in quantity demanded. The demand for latex gloves is

Correct AnswerverifiedShow Answer

Summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price is referred to as __________.

Correct AnswerverifiedShow Answer

What pricing method is often used because of the difficulty in establishing a benchmark of sales or investment to show how much of a firm's effort is needed to achieve the target?

Correct AnswerverifiedShow Answer

How do consumers use price in their assessments of value?

Correct AnswerverifiedFrom a consumer's standpoint, price is o...View AnswerShow Answer

According to the textbook, clothing manufacturer Hart Schaffner & Marx and retailer Bloomingdale's use __________ pricing.

Correct AnswerverifiedShow Answer

A Patek Philippe Sky Moon Tourbillion men's wristwatch is among the most expensive in the world, costing over $1.75 million. This is an example of a __________ strategy.

Correct AnswerverifiedShow Answer

Which of the following statements regarding pricing constraints is most accurate?

Correct AnswerverifiedShow Answer

While pricing objectives frequently reflect corporate goals, pricing constraints often relate to

Correct AnswerverifiedShow Answer

When buying a car, __________ may result in discriminatory practices.

Correct AnswerverifiedShow Answer

Which of the following statements about penetration pricing is most accurate?

Correct AnswerverifiedShow Answer

-Jane Westerlund owns a picture frame store and has generated a spreadsheet of several calculations based on different quantity, price, revenue, cost, and profit scenarios shown in Figure 11-5 above. What is the break-even point quantity for her picture frame store?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The formula, Total revenue - Total cost or [(Unit price × Quantity sold) - (Fixed cost + Variable cost) ] represents __________.

Correct AnswerverifiedShow Answer

Four pricing practices are closely scrutinized because of potential unethical or illegal actions. They include: (1) predatory pricing; (2) price discrimination; (3) deceptive pricing; and (4) __________.

Correct AnswerverifiedShow Answer

Which term describes factors that limit the range of prices a firm may set?

Correct AnswerverifiedShow Answer

-Figure 11-2 above represents the four approaches to selecting an appropriate price level. Box C includes target profit and target return on sales so it represents which approach?

Correct AnswerverifiedShow Answer

A flexible-price policy refers to

Correct AnswerverifiedShow Answer

Correct Answer
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From a consumer's standpoint, price is o...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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