Question 1

Differential pricing means different buyers pay different prices for the same quality and quantity of product.

Accepted Answer

A) True 
 B)False  True

Question 2

If demand is elastic, a change in price causes a parallel change in total revenue.

Accepted Answer

A) True 
 B)False

Question 3

What type of pricing objective would an organization use if it were in a favorable position and desired nothing more?

Accepted Answer

A)  Return on investment
B)  Cash flow
C)  Profit
D)  Status quo
E)  SurvivalF) All of the above
G) None of the above

Question 4

Competition-based pricing is

Accepted Answer

A)  used when costs and revenues are secondary to competitors' prices.
B)  not useful as a method of increasing market share.
C)  not useful if the competing products are homogeneous.
D)  not able to increase sales.
E)  used when competing products are heterogeneous.F) C) and D)
G) A) and E)

Question 5

Myra's company just purchased $600 worth of supplies from Office Depot. The terms for payment are 2/10 net 30. If Myra's firm pays in the next week, it will pay ___________. If Myra's company waits three weeks to pay Office Depot, it will pay _____________.

Accepted Answer

A)  $600; $630
B)  $588; $600
C)  $540; $588
D)  $540; $600
E)  $588; $630F) A) and C)
G) D) and E)

Question 6

A marketer uses only one pricing objective to avoid organizational confusion.

Accepted Answer

A) True 
 B)False  False

Question 7

Wendy's restaurants have experienced declining sales recently due to consumers' increased interest in healthier eating and their preference for fast-casual restaurants such as Chipotle and Modern Market. In order to attract more customers to Wendy's, the chain expanded the number of items they are offering on the $1 menu, and many of these items are priced below cost. Wendy's is most likely utilizing a _____ pricing objective.

Accepted Answer

A)  survival
B)  profit
C)  market share
D)  return on investmentE) All of the above
F) C) and D)

Question 8

If Wilson Sporting Goods faces a standard demand curve that exists for most products, as it raises the price of its tennis rackets, the

Accepted Answer

A)  quantity demanded goes down.
B)  demand remains constant.
C)  quantity demanded increases.
D)  demand increases.
E)  breakeven increases.F) B) and D)
G) B) and E)

Question 9

If Dell uses _____ pricing for its newest version of laptops, it is probably most interested in obtaining market share; and it is assuming

Accepted Answer

A)  premium pricing; that no other competitors are likely to enter the market soon.
B)  price-skimming; that no other competitors are likely to enter the market soon.
C)  premium pricing; it needs to recoup R & D costs as soon as possible.
D)  penetration pricing; that no other competitors are likely to enter the market soon.
E)  penetration pricing; that other competitors could enter the market easily.F) All of the above
G) A) and B)

Question 10

Zoey is setting a price for her store's newest item. She purchased the item for $45 and decides to sell it for $54 using markup pricing. If she wanted to calculate the markup as percentage of cost, it would be ______________. If she wanted to calculate the markup as the percentage of the selling price, it would be ______________.

Accepted Answer

A)  16.7%; 12%
B)  33%; 25%
C)  12.5%; 15.6%
D)  12%; 16.7%
E)  15%; 10.5%F) C) and E)
G) A) and D)

Question 11

The fact that senior citizens are charged a lower price at movie theaters than younger adults is an example of ____ pricing.

Accepted Answer

A)  price-line
B)  promotional
C)  professional
D)  differential
E)  psychologicalF) C) and E)
G) A) and B)

Question 12

F.O.B. factory denotes the price of the products at the factory. If the price is quoted as F.O.B. shipping, then shipping costs are paid by the seller.

Accepted Answer

A) True 
 B)False

Question 13

Iota Designs thinks its new product, the Automatic Dog Walker, will have a short product life cycle; therefore, its marketing department sets its primary pricing objective as

Accepted Answer

A)  market share.
B)  cash flow.
C)  profit.
D)  product quality.
E)  status quo.F) C) and E)
G) A) and D) B

Question 14

When determining the markup, it is important to know whether it is based on cost or selling price.

Accepted Answer

A) True 
 B)False

Question 15

Explain the difference between cost-plus and markup pricing.

Accepted Answer

With cost-plus pricing, the seller's cos...

Question 16

When establishing prices, a marketer's first step is to

Accepted Answer

A)  determine demand.
B)  develop pricing objectives.
C)  select a pricing policy.
D)  evaluate competitors' prices.
E)  determine a pricing method.F) A) and E)
G) B) and E)

Question 17

At the breakeven point,

Accepted Answer

A)  the money a company brings in from selling products equals the amount spent producing the products.
B)  the total fixed costs are exactly equal to the total variable costs.
C)  profits are exactly equal to the difference between revenue and total variable costs.
D)  the marginal revenue of a product is exactly equal to the marginal cost of producing one more unit.
E)  the marginal cost curve and the average cost curve will be identical for a particular product.F) D) and E)
G) B) and D)

Question 18

A psychological price is designed to encourage purchases on the basis of rational response rather than on the basis of emotional reactions.

Accepted Answer

A) True 
 B)False

Question 19

Marketers at organizations engaged in nonprice competition

Accepted Answer

A)  are more concerned about knowing competitors' prices than are marketers in organizations that are engaged in price competition.
B)  are not concerned about the prices of competing brands.
C)  need competitive price information to make sure that their products are priced at approximately the same level as the prices of competing brands.
D)  rely on customers to help them gather information regarding the prices of competing brands.
E)  experience high levels of price instability.F) A) and B)
G) A) and C)

Question 20

Explain differential pricing and then describe the four major types.

Accepted Answer

Differential pricing means charging diff...

Exam 12: Pricing Concepts and Management

Differential pricing means different buyers pay different prices for the same quality and quantity of product.

Correct Answer
verified
True

If demand is elastic, a change in price causes a parallel change in total revenue.

Correct Answer
verified

What type of pricing objective would an organization use if it were in a favorable position and desired nothing more?

Correct Answer
verified

Competition-based pricing is

Correct Answer
verified

Myra's company just purchased $600 worth of supplies from Office Depot. The terms for payment are 2/10 net 30. If Myra's firm pays in the next week, it will pay _. If Myra's company waits three weeks to pay Office Depot, it will pay ___.

Correct Answer
verified

A marketer uses only one pricing objective to avoid organizational confusion.

Correct Answer
verified
False

Correct Answer
verified

If Wilson Sporting Goods faces a standard demand curve that exists for most products, as it raises the price of its tennis rackets, the

Correct Answer
verified

If Dell uses _____ pricing for its newest version of laptops, it is probably most interested in obtaining market share; and it is assuming

Correct Answer
verified

Correct Answer
verified

The fact that senior citizens are charged a lower price at movie theaters than younger adults is an example of ____ pricing.

Correct Answer
verified

F.O.B. factory denotes the price of the products at the factory. If the price is quoted as F.O.B. shipping, then shipping costs are paid by the seller.

Correct Answer
verified

Iota Designs thinks its new product, the Automatic Dog Walker, will have a short product life cycle; therefore, its marketing department sets its primary pricing objective as

Correct Answer
verified
B

When determining the markup, it is important to know whether it is based on cost or selling price.

Correct Answer
verified

Explain the difference between cost-plus and markup pricing.

Correct Answer
verified
With cost-plus pricing, the seller's cos...
View Answer

When establishing prices, a marketer's first step is to

Correct Answer
verified

At the breakeven point,

Correct Answer
verified

A psychological price is designed to encourage purchases on the basis of rational response rather than on the basis of emotional reactions.

Correct Answer
verified

Marketers at organizations engaged in nonprice competition

Correct Answer
verified

Explain differential pricing and then describe the four major types.

Correct Answer
verified
Differential pricing means charging diff...
View Answer

Exam 12: Pricing Concepts and Management

Differential pricing means different buyers pay different prices for the same quality and quantity of product.

Correct AnswerverifiedTrue

If demand is elastic, a change in price causes a parallel change in total revenue.

Correct AnswerverifiedShow Answer

What type of pricing objective would an organization use if it were in a favorable position and desired nothing more?

Correct AnswerverifiedShow Answer

Competition-based pricing is

Correct AnswerverifiedShow Answer

Myra's company just purchased $600 worth of supplies from Office Depot. The terms for payment are 2/10 net 30. If Myra's firm pays in the next week, it will pay ___________. If Myra's company waits three weeks to pay Office Depot, it will pay _____________.

Correct AnswerverifiedShow Answer

A marketer uses only one pricing objective to avoid organizational confusion.

Correct AnswerverifiedFalse

Correct AnswerverifiedShow Answer

If Wilson Sporting Goods faces a standard demand curve that exists for most products, as it raises the price of its tennis rackets, the

Correct AnswerverifiedShow Answer

If Dell uses _____ pricing for its newest version of laptops, it is probably most interested in obtaining market share; and it is assuming

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The fact that senior citizens are charged a lower price at movie theaters than younger adults is an example of ____ pricing.

Correct AnswerverifiedShow Answer

F.O.B. factory denotes the price of the products at the factory. If the price is quoted as F.O.B. shipping, then shipping costs are paid by the seller.

Correct AnswerverifiedShow Answer

Iota Designs thinks its new product, the Automatic Dog Walker, will have a short product life cycle; therefore, its marketing department sets its primary pricing objective as

Correct AnswerverifiedB

When determining the markup, it is important to know whether it is based on cost or selling price.

Correct AnswerverifiedShow Answer

Explain the difference between cost-plus and markup pricing.

Correct AnswerverifiedWith cost-plus pricing, the seller's cos...View AnswerShow Answer

When establishing prices, a marketer's first step is to

Correct AnswerverifiedShow Answer

At the breakeven point,

Correct AnswerverifiedShow Answer

A psychological price is designed to encourage purchases on the basis of rational response rather than on the basis of emotional reactions.

Correct AnswerverifiedShow Answer

Marketers at organizations engaged in nonprice competition

Correct AnswerverifiedShow Answer

Explain differential pricing and then describe the four major types.

Correct AnswerverifiedDifferential pricing means charging diff...View AnswerShow Answer

Correct Answer
verified
True

Correct Answer
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Correct Answer
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Correct Answer
verified

Myra's company just purchased $600 worth of supplies from Office Depot. The terms for payment are 2/10 net 30. If Myra's firm pays in the next week, it will pay _. If Myra's company waits three weeks to pay Office Depot, it will pay ___.

Correct Answer
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Correct Answer
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False

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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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B

Correct Answer
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Correct Answer
verified
With cost-plus pricing, the seller's cos...
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
verified
Differential pricing means charging diff...
View Answer