Question 1

Setting a price to achieve a profit that is a specified percentage of the sales volume is referred to as __________.

Accepted Answer

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

Question 2

Product-line pricing involves determining: (1) the lowest-priced product and price; (2) the highest-priced product and price;and (3) __________.

Accepted Answer

A)  the single most popular item in the line
B)  the least vulnerable product in the line
C)  the most frequently sold product in the line
D)  the most price insensitive product in the line
E)  the price differentials for all other products in the line

Question 3

Marketing two or more products in a single package price is referred to as

Accepted Answer

A)  package pricing.
B)  loss-leader pricing.
C)  bundle pricing.
D)  tie-in pricing.
E)  multi-product pricing.

Question 4

Which of the following is a competition-oriented approach to pricing?

Accepted Answer

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

Question 5

A dynamic pricing policy allows marketers to respond to

Accepted Answer

A)  requests for allowances.
B)  threats of discrimination.
C)  success measures for the firm's previous promotions.
D)  changes in demand,cost,and competitive factors.
E)  inquiries by government agencies.

Question 6

A penetration pricing policy is MOST LIKELY to be effective when

Accepted Answer

A)  lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost.
B)  the high initial price will not attract competitors.
C)  a low initial price discourages competitors from entering the market.
D)  customers interpret the high price as signifying high quality.
E)  enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable.

Question 7

Odd-even pricing is most closely related to

Accepted Answer

A)  retailers' perceptions of price.
B)  customers' perceptions of price.
C)  wholesalers' markups.
D)  a manufacturer's costs.
E)  competitors' perceptions of price.

Question 8

Geographical adjustments are made by manufacturers or even wholesalers to list or quoted prices to reflect

Accepted Answer

A)  loyalty to the local economy whether it be city,state,or nationally designated.
B)  changes in price due to tariffs or excise taxes.
C)  the cost of transportation of the products from seller to buyer.
D)  the differentiated aspect of the particular product or service.
E)  simplicity in pricing structures.

Question 9

The practice of replacing promotional allowances with lower manufacturer list prices is referred to as

Accepted Answer

A)  everyday low pricing.
B)  everyday fair pricing.
C)  trade-in allowances.
D)  markdown pricing.
E)  everyday value pricing.

Question 10

The most commonly used pricing method for business products is __________.

Accepted Answer

A)  target return on investment
B)  customary
C)  standard markup
D)  target profit
E)  cost-plus pricing

Question 11

Architectural firms that specialize in designing and constructing one-of-a-kind custom buildings such as the Rock Hall of Fame often use which pricing strategy?

Accepted Answer

A)  cost-plus pricing
B)  experience curve pricing
C)  standard markup pricing
D)  yield management pricing
E)  price lining

Question 12

Figure 14-5 above shows the results of a spreadsheet simulation to select a price to achieve a target return on investment (ROI) .What is the ROI for Scenario "A"?

Accepted Answer

A)  0%
B)  5%
C)  10%
D)  14%
E)  17%

Question 13

All of the following are cost-oriented approaches to select an approximate price level EXCEPT:

Accepted Answer

A)  cost-plus fixed fee pricing.
B)  standard markup.
C)  yield management.
D)  experience curve.
E)  cost-plus percentage-of-cost pricing.

Question 14

According to Figure 14-1 above,"F" represents which step in the price-setting process?

Accepted Answer

A)  set list or quoted price
B)  select an approximate price level
C)  scan competitors for prices of similar products or services
D)  make special adjustments to list or quoted price
E)  establish the price range

Question 15

What pricing strategy did the architectural firm use to set the construction price for the Rock and Roll Hall of Fame,which is shown in the photo above?

Accepted Answer

A)  cost-plus-percentage-of-cost pricing
B)  experience curve pricing
C)  standard markup pricing
D)  yield management pricing
E)  cost-plus fixed-fee pricing

Question 16

Estimating demand and revenue would occur during __________ of the price-setting process.

Accepted Answer

A)  Step 1
B)  Step 2
C)  Step 3
D)  Step 4
E)  Step 5

Question 17

All of the following statements regarding the legal and regulatory aspects of pricing are true EXCEPT:

Accepted Answer

A)  there has been a movement towards a "rule of reason" in both horizontal and vertical price fixing cases.
B)  the Robinson-Patman Act allows for price differentials to different customers under the "cost justification defense."
C)  a manufacturer's MSRP has been declared illegal per se by a recent U.S.Supreme Court decision.
D)  The "rule of reason" perspective is the direct opposite of the per se rule.
E)  wholesalers can fix the maximum retail price for their products provided the price agreement does not create an "unreasonable restraint of trade."

Question 18

Which of the following statements regarding cost-oriented approaches is most accurate?

Accepted Answer

A)  These methods focus on the demand side of the pricing problem.
B)  These methods focus on production and marketing expenses.
C)  Target return on investment is an example of a cost-oriented method.
D)  Experience curve pricing is simple to use because costs predictably decrease by 25 percent with each doubling of production.
E)  Cost-oriented approaches are a subcategory of competition-oriented methods.

Question 19

Setting the price of a line of products at a number of different specific price points is referred to as __________.

Accepted Answer

A)  odd-even pricing
B)  bundle pricing
C)  cost-plus pricing
D)  price lining
E)  prestige pricing

Question 20

According to the textbook,Revlon cosmetics uses __________ pricing.

Accepted Answer

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

Exam 14: Arriving at the Final Price

Which of the following is a competition-oriented approach to pricing?

Correct AnswerverifiedShow Answer

All of the following statements regarding the legal and regulatory aspects of pricing are true EXCEPT:

Correct AnswerverifiedShow Answer

Marketing two or more products in a single package price is referred to as

Correct AnswerverifiedShow Answer

A dynamic pricing policy allows marketers to respond to

Correct AnswerverifiedShow Answer

The most commonly used pricing method for business products is __________.

Correct AnswerverifiedShow Answer

Architectural firms that specialize in designing and constructing one-of-a-kind custom buildings such as the Rock Hall of Fame often use which pricing strategy?

Correct AnswerverifiedShow Answer

Product-line pricing involves determining: (1) the lowest-priced product and price; (2) the highest-priced product and price;and (3) __________.

Correct AnswerverifiedShow Answer

A penetration pricing policy is MOST LIKELY to be effective when

Correct AnswerverifiedShow Answer

Which of the following statements regarding cost-oriented approaches is most accurate?

Correct AnswerverifiedShow Answer

According to Figure 14-1 above,"F" represents which step in the price-setting process?

Correct AnswerverifiedShow Answer

Estimating demand and revenue would occur during __________ of the price-setting process.

Correct AnswerverifiedShow Answer

Setting a price to achieve a profit that is a specified percentage of the sales volume is referred to as __________.

Correct AnswerverifiedShow Answer

What pricing strategy did the architectural firm use to set the construction price for the Rock and Roll Hall of Fame,which is shown in the photo above?

Correct AnswerverifiedShow Answer

Figure 14-5 above shows the results of a spreadsheet simulation to select a price to achieve a target return on investment (ROI) .What is the ROI for Scenario "A"?

Correct AnswerverifiedShow Answer

Geographical adjustments are made by manufacturers or even wholesalers to list or quoted prices to reflect

Correct AnswerverifiedShow Answer

All of the following are cost-oriented approaches to select an approximate price level EXCEPT:

Correct AnswerverifiedShow Answer

The practice of replacing promotional allowances with lower manufacturer list prices is referred to as

Correct AnswerverifiedShow Answer

According to the textbook,Revlon cosmetics uses __________ pricing.

Correct AnswerverifiedShow Answer

Odd-even pricing is most closely related to

Correct AnswerverifiedShow Answer

Setting the price of a line of products at a number of different specific price points is referred to as __________.

Correct AnswerverifiedShow Answer

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