Question 1

Tara is enrolled for spring semester at college.The tuition is $6,000,but she has a scholarship for $1,000 as well as a work-study grant of $1,500.The health fees and student activity fees are $150 for the semester.What is the final price that Tara will pay for the spring semester?

Accepted Answer

A)  $2,500
B)  $2,650
C)  $3,150
D)  $3,650
E)  $6,150F) None of the above
G) A) and C)

Question 2

A primary reason for Washburn's success is

Accepted Answer

A)  underselling competitors by mass-producing fine-quality guitars.
B)  developing product lines at different price points for different market segments.
C)  offering significant price breaks to well-known performers in exchange for product endorsements.
D)  selling traditional American "rock 'n roll" guitars in global markets.
E)  setting up free music programs and donating low-price-point guitars to students in schools that have lost their music programs due to budget constraints.F) None of the above
G) A) and B)

Question 3

The percentage change in quantity demanded relative to the percentage change in price is referred to as

Accepted Answer

A)  price elasticity of demand.
B)  demand derivative of price.
C)  average demand.
D)  marginal revenue.
E)  derived demand.F) A) and D)
G) C) and E)

Question 4

Southern gardeners normally pay $5 for a 2-cubit-foot bag of pine bark mulch that they buy at their local gardening-supply and home-improvement stores to keep the weeds down in their gardens.If the price being charged by a retailer is not within a narrow range that gardeners feel is appropriate,they will use substitutions-newspaper,grass clippings,or some other kind of ground covering.When pricing pine bark mulch,a garden-supply or home-improvement retailer should use

Accepted Answer

A)  customary pricing.
B)  at-market pricing.
C)  loss-leader pricing.
D)  penetration pricing.
E)  bundle pricing.F) A) and E)
G) A) and D)

Question 5

Unit variable cost refers to variable cost expressed

Accepted Answer

A)  as the sum of all units sold.
B)  on a per unit basis for a product.
C)  as a percentage of total sales.
D)  as a percentage of fixed costs.
E)  as a percentage of total costs.F) C) and E)
G) B) and C)

Question 6

Forever Quilting is a small company that makes quilting kits priced at $120 each.There is no quantity discount.The costs of the materials that go into each kit are $45.It costs $5 in labor to assemble a kit.The company has monthly expenses of $1,000 for rent and insurance,$200 for heat and electricity,$500 for advertising,and $4,500 for the monthly salary of its owner.Last month the company sold 150 kits.Forever Quilting's total revenue for the month was

Accepted Answer

A)  $4,300.
B)  $6,200.
C)  $7,500.
D)  $10,500.
E)  $18,000.F) None of the above
G) All of the above

Question 7

Price fixing is illegal under the

Accepted Answer

A)  Sherman Act.
B)  Consumer Goods Pricing Act.
C)  Robinson-Patman Act.
D)  Federal Trade Commission Act.
E)  Clayton Act.F) C) and D)
G) B) and E)

Question 8

Fixed cost refers to

Accepted Answer

A)  the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold.
B)  the total expense incurred by a firm in producing and marketing a product,which equals the sum of overhead cost and variable cost.
C)  the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold.
D)  the average amount of money received for selling one unit of a product or simply the price of that unit.
E)  the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and soldF) C) and D)
G) All of the above

Question 9

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

Accepted Answer

A)  fixed pricing
B)  a one price policy
C)  a flexible price policy
D)  target return-on-sales pricing
E)  "no haggle" pricingF) D) and E)
G) B) and D)

Question 10

A target return profit objective implies that a company chooses to

Accepted Answer

A)  set targets whose performance can be measured quickly.
B)  give up immediate profit in exchange for achieving a higher market share in hopes of penetrating competitive markets.
C)  set a profit goal that is often determined by its board of directors.
D)  reduce investment in any further market or product research.
E)  set prices based on return on sales.F) B) and D)
G) C) and D)

Question 11

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 given to wholesalers and retailers to arrive at the $989 retail price.Asko used

Accepted Answer

A)  prestige pricing.
B)  price lining.
C)  cost-plus pricing.
D)  target pricing.
E)  customary pricing.F) A) and D)
G) B) and E)

Question 12

All of the following are examples of pricing objectives EXCEPT:

Accepted Answer

A)  market share.
B)  survival.
C)  unit volume.
D)  social responsibility.
E)  competitors' prices.F) A) and B)
G) A) and C)

Question 13

A penetration pricing policy is MOST LIKELY to be effective when

Accepted Answer

A)  lowering the price has only a minor effect on increasing sales volume and reducing unit costs.
B)  many segments of the market are price sensitive.
C)  the high initial prices do not attract competitors.
D)  customers interpret high price as signifying high quality.
E)  customers are willing to buy immediately at the high initial price.F) None of the above
G) All of the above

Question 14

Which of the following statements regarding new car purchases in the U.S.is most accurate?

Accepted Answer

A)  While men of all races pay basically the same price,women,regardless of race,pay considerably less.
B)  Seventy-nine percent of all men purchasing cars cite haggling over price as the most exciting aspects of the purchase.
C)  A one-price policy is now the standard in the automobile industry due to violations of the Robinson-Patman Act.
D)  Female automobile salespeople rarely,if ever,offer flexible pricing to women customers.
E)  African-Americans,women,and Hispanics pay higher prices than the average price paid for a new car.F) A) and D)
G) A) and C)

Question 15

Demand-oriented approaches weigh factors that underlie expected __________ more heavily than such factors as cost,profit,and competition when selecting a price level.

Accepted Answer

A)  total revenue
B)  stakeholder concerns
C)  prevailing prices
D)  product substitutes
E)  customer tastesF) C) and D)
G) B) and C)

Question 16

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

Accepted Answer

A)  predatory pricing
B)  price discounting
C)  test markets
D)  regional rollbacks
E)  delayed payment penaltiesF) None of the above
G) A) and E)

Question 17

Price discrimination refers to

Accepted Answer

A)  the practice of charging different prices to different buyers for goods of like grade and quality.
B)  an arrangement a manufacturer makes with a reseller to handle only its products and not those of a competitor.
C)  the practice of charging a very low price for a product with the intent of driving competitors out of business.
D)  a conspiracy among firms to set prices for a product or service.
E)  a seller's requirement that the purchaser of one product also buy another product in the line.F) A) and E)
G) B) and D)

Question 18

You have been asked to calculate the break-even point for a new line of souvenir T-shirts.The selling price will be $25 per shirt.The labor cost is $5 per shirt.The administrative costs of operating the company are estimated to be $60,000 annually and the sales and marketing expenses are $20,000 a year.Additionally,the cost of materials will be $10 per shirt.What is the break-even quantity?

Accepted Answer

A)  2,000 shirts
B)  3,200 shirts
C)  5,334 shirts
D)  8,000 shirts
E)  16,000 shirtsF) C) and D)
G) D) and E)

Question 19

The __________ equation = (Unit price × Quantity sold) − Total cost.

Accepted Answer

A)  total revenue
B)  variable cost
C)  net present value
D)  profit
E)  break-even pointF) A) and D)
G) A) and B)

Question 20

Individuals can choose to purchase Microsoft stand-alone software packages,such as the Home and Student versions of Word,Excel,and PowerPoint,for $119.99 each.However,they may choose to purchase the Office Home and Student suite,which has all of these applications in the same package,for a price of $149.99.Microsoft is using a __________ pricing strategy.

Accepted Answer

A)  penetration
B)  prestige
C)  bundle
D)  odd-even
E)  standard mark-upF) A) and C)
G) B) and C)

Exam 11: Pricing Products and Services

A penetration pricing policy is MOST LIKELY to be effective when

Correct Answer
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Correct Answer
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Fixed cost refers to

Correct Answer
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Which of the following statements regarding new car purchases in the U.S.is most accurate?

Correct Answer
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Demand-oriented approaches weigh factors that underlie expected __________ more heavily than such factors as cost,profit,and competition when selecting a price level.

Correct Answer
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Unit variable cost refers to variable cost expressed

Correct Answer
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Tara is enrolled for spring semester at college.The tuition is $6,000,but she has a scholarship for $1,000 as well as a work-study grant of $1,500.The health fees and student activity fees are $150 for the semester.What is the final price that Tara will pay for the spring semester?

Correct Answer
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A primary reason for Washburn's success is

Correct Answer
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The percentage change in quantity demanded relative to the percentage change in price is referred to as

Correct Answer
verified

Correct Answer
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All of the following are examples of pricing objectives EXCEPT:

Correct Answer
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Correct Answer
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The __________ equation = (Unit price × Quantity sold) − Total cost.

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

Correct Answer
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Price discrimination refers to

Correct Answer
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Price fixing is illegal under the

Correct Answer
verified

Correct Answer
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A target return profit objective implies that a company chooses to

Correct Answer
verified

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

Correct Answer
verified

Exam 11: Pricing Products and Services

A penetration pricing policy is MOST LIKELY to be effective when

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Fixed cost refers to

Correct AnswerverifiedShow Answer

Which of the following statements regarding new car purchases in the U.S.is most accurate?

Correct AnswerverifiedShow Answer

Demand-oriented approaches weigh factors that underlie expected __________ more heavily than such factors as cost,profit,and competition when selecting a price level.

Correct AnswerverifiedShow Answer

Unit variable cost refers to variable cost expressed

Correct AnswerverifiedShow Answer

Tara is enrolled for spring semester at college.The tuition is $6,000,but she has a scholarship for $1,000 as well as a work-study grant of $1,500.The health fees and student activity fees are $150 for the semester.What is the final price that Tara will pay for the spring semester?

Correct AnswerverifiedShow Answer

A primary reason for Washburn's success is

Correct AnswerverifiedShow Answer

The percentage change in quantity demanded relative to the percentage change in price is referred to as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

All of the following are examples of pricing objectives EXCEPT:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The __________ equation = (Unit price × Quantity sold) − Total cost.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Price discrimination refers to

Correct AnswerverifiedShow Answer

Price fixing is illegal under the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A target return profit objective implies that a company chooses to

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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