Question 1

Setting the price of a product or service by adding a fixed percentage to the total unit cost is referred to as

Accepted Answer

A)  cost-plus-fixed-percentage fee pricing.
B)  target pricing.
C)  cost-plus-percentage-of-cost pricing.
D)  experience curve percentage pricing.
E)  target return on investment pricing.F) None of the above
G) A) and E)

Question 2

To encourage retailers to pay their bills quickly,manufacturers offer them

Accepted Answer

A)  quantity discounts.
B)  cash discounts.
C)  flexible pricing policies.
D)  promotional allowances.
E)  manufacturer's inducements.F) A) and B)
G) A) and C)

Question 3

Suppose a manufacturer quotes price in the following form: List price-$100 less 30/10/5.When calculating this trade discount,the first number "30" in the percentage sequence always refers to the

Accepted Answer

A)  discount to the ultimate consumer.
B)  manufacturer's cost.
C)  retail end of the channel.
D)  channel intermediary closest to the manufacturer.
E)  original unit cost.F) A) and B)
G) B) and E)

Question 4

In response to Duracell's introduction of the Duracell Ultra battery,Energizer introduced an Advanced Formula battery.But unlike Duracell,Energizer priced its batteries at a low initial price,believing that consumers were too price sensitive to pay more in this category.In this case,Energizer used

Accepted Answer

A)  penetration pricing.
B)  prestige pricing.
C)  skimming pricing.
D)  price lining.
E)  cost-plus fixed-fee pricing.F) A) and B)
G) B) and E)

Question 5

For which of the following products is its manufacturer most likely to use basing-point pricing?

Accepted Answer

A)  pet food
B)  furniture
C)  crystal glass bowls
D)  coal
E)  cut flowersF) A) and D)
G) C) and D)

Question 6

Setting one price for all buyers of a product or service is referred to as

Accepted Answer

A)  customary pricing.
B)  a fixed-price policy.
C)  a dynamic pricing policy.
D)  standard markup pricing.
E)  uniform pricing.F) A) and C)
G) B) and E)

Question 7

According to the text,clothing manufacturer Christian Dior and retailer Neiman Marcus use ________ pricing.

Accepted Answer

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

Question 8

Southern gardeners normally pay $5 for a two-cubic-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 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) B) and D)
G) D) and E)

Question 9

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 E)
G) A) and B)

Question 10

Experience curve pricing refers to

Accepted Answer

A)  the method of pricing where the price of a product often rises following the expansion of costs associated with the firm's producing and selling an increased volume of the product.
B)  the point at which profits double,then double again,as more consumers buy the product.
C)  a predictive pricing plan based upon the knowledge that the prices will fluctuate in a predictable pattern within a given industry based on the diffusion of innovation.
D)  a method of pricing based on the learning effect,which holds that the unit cost of many products and services declines by 10 to 30 percent each time a firm's experience at producing and selling them doubles.
E)  a pricing strategy that uses price estimates based upon the consensus of the salesforce and the firm's top management team.F) A) and D)
G) All of the above

Question 11

When a seller represents a price as reduced,the item must have been offered in good faith at a higher price for a substantial previous period.Former price comparisons are deceptive if

Accepted Answer

A)  the high price tags were from a previous owner or retailer and were purchased that way from the reseller,even though that price didn't originate at the store.
B)  the items for sale were part of a manufacturer's promotional allowance.
C)  a high price was set for the purpose of establishing a reference for a price reduction.
D)  the items for sale were available at the higher price for less than 30 days.
E)  the items were purchased from the manufacturer at a higher price and the sale was part of a loss-leader promotion.F) A) and B)
G) None of the above

Question 12

A retailer purchased a gross (144) of silk shells each costing exactly $17.Although the only difference between the shells was color,when they were put on the floor,the primary colors were marked $25,the pastel colors were marked $28,and the black and white shells were marked $30.These prices were set most likely because

Accepted Answer

A)  retailers using a price lining strategy will occasionally mark up items based on color,style,and expected consumer demand.
B)  fewer people buy black and white shells,so the retailer has to charge a higher price to break even.
C)  the retailer is using prestige pricing;black and white shells are more elegant.
D)  the primary colors were priced using a penetration strategy,the pastels were priced using a skimming strategy,and the black and white shells were priced using prestige pricing.
E)  price lining is essentially the same as above-,at-,or below-market pricing.F) A) and B)
G) All of the above

Question 13

Give an example of yield management pricing and explain why it is used.

Accepted Answer

Yield management pricing is charging dif...

Question 14

Which of the following companies would be most likely to use target return-on-investment pricing?

Accepted Answer

A)  a farmer
B)  a supermarket chain
C)  a book publisher
D)  a veterinarian
E)  an automobile manufacturerF) A) and E)
G) A) and C)

Question 15

Target return-on-investment pricing refers to

Accepted Answer

A)  setting a price to achieve an annual target ROA.
B)  adding a fixed percentage to the cost of all items in a specific product class.
C)  setting prices to achieve a profit that is a specified percentage of the sales volume.
D)  setting a price to achieve an annual target ROI.
E)  setting a price based on an annual specific dollar target volume of profit.F) A) and E)
G) A) and C)

Question 16

Adding a fixed percentage to the cost of all items in a specific product class is referred to as

Accepted Answer

A)  target profit pricing.
B)  standard markup pricing.
C)  target return-on-investment pricing.
D)  customary pricing.
E)  everyday low pricing.F) A) and B)
G) B) and C)

Question 17

Prestige pricing refers to

Accepted Answer

A)  charging different prices to different buyers for goods of like grade and quality.
B)  setting a low initial price on a new product to appeal immediately to the mass market odd-even pricing.
C)  setting a market price for a product or product class based on a subjective feel for the competitors' price or market price.
D)  setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it.
E)  setting a price that is dictated by tradition,a standardized channel of distribution,or other competitive factors.F) D) and E)
G) A) and B)

Question 18

After extensive analysis,a mail order company has decided to embark on a policy of multiple-zone pricing.In which step of the price-setting process would the mail order firm have made this decision?

Accepted Answer

A)  Step 6: Make special adjustments to the list or quoted price.
B)  Step 4: Select an approximate price level.
C)  Step 2: Estimate demand and revenue.
D)  Step 1: Identify price constraints and objectives.
E)  Step 5: Set list or quoted price.F) B) and C)
G) C) and D)

Question 19

What is standard markup pricing and when would it be used?

Accepted Answer

Standard markup pricing entails adding a...

Question 20

Your local instant photocopying service charges 10 cents a copy up to 25 copies,9 cents a copy for 26 to 99 copies,and 8 cents a copy for 100 copies or more.What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

Accepted Answer

A)  experience curve pricing
B)  loss-leader pricing
C)  a quantity discount
D)  a promotional discount
E)  everyday low pricingF) C) and D)
G) D) and E)

Exam 14: Arriving at the Final Price

Suppose a manufacturer quotes price in the following form: List price-$100 less 30/10/5.When calculating this trade discount,the first number "30" in the percentage sequence always refers to the

Correct Answer
verified

Experience curve pricing refers to

Correct Answer
verified

Which of the following companies would be most likely to use target return-on-investment pricing?

Correct Answer
verified

What is standard markup pricing and when would it be used?

Correct Answer
verified
Standard markup pricing entails adding a...
View Answer

Price fixing is illegal under the

Correct Answer
verified

When a seller represents a price as reduced,the item must have been offered in good faith at a higher price for a substantial previous period.Former price comparisons are deceptive if

Correct Answer
verified

According to the text,clothing manufacturer Christian Dior and retailer Neiman Marcus use ________ pricing.

Correct Answer
verified

Setting one price for all buyers of a product or service is referred to as

Correct Answer
verified

For which of the following products is its manufacturer most likely to use basing-point pricing?

Correct Answer
verified

Your local instant photocopying service charges 10 cents a copy up to 25 copies,9 cents a copy for 26 to 99 copies,and 8 cents a copy for 100 copies or more.What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

Correct Answer
verified

Give an example of yield management pricing and explain why it is used.

Correct Answer
verified
Yield management pricing is charging dif...
View Answer

Target return-on-investment pricing refers to

Correct Answer
verified

In response to Duracell's introduction of the Duracell Ultra battery,Energizer introduced an Advanced Formula battery.But unlike Duracell,Energizer priced its batteries at a low initial price,believing that consumers were too price sensitive to pay more in this category.In this case,Energizer used

Correct Answer
verified

Correct Answer
verified

Setting the price of a product or service by adding a fixed percentage to the total unit cost is referred to as

Correct Answer
verified

To encourage retailers to pay their bills quickly,manufacturers offer them

Correct Answer
verified

Prestige pricing refers to

Correct Answer
verified

After extensive analysis,a mail order company has decided to embark on a policy of multiple-zone pricing.In which step of the price-setting process would the mail order firm have made this decision?

Correct Answer
verified

Adding a fixed percentage to the cost of all items in a specific product class is referred to as

Correct Answer
verified

Correct Answer
verified

Exam 14: Arriving at the Final Price

Suppose a manufacturer quotes price in the following form: List price-$100 less 30/10/5.When calculating this trade discount,the first number "30" in the percentage sequence always refers to the

Correct AnswerverifiedShow Answer

Experience curve pricing refers to

Correct AnswerverifiedShow Answer

Which of the following companies would be most likely to use target return-on-investment pricing?

Correct AnswerverifiedShow Answer

What is standard markup pricing and when would it be used?

Correct AnswerverifiedStandard markup pricing entails adding a...View AnswerShow Answer

Price fixing is illegal under the

Correct AnswerverifiedShow Answer

When a seller represents a price as reduced,the item must have been offered in good faith at a higher price for a substantial previous period.Former price comparisons are deceptive if

Correct AnswerverifiedShow Answer

According to the text,clothing manufacturer Christian Dior and retailer Neiman Marcus use ________ pricing.

Correct AnswerverifiedShow Answer

Setting one price for all buyers of a product or service is referred to as

Correct AnswerverifiedShow Answer

For which of the following products is its manufacturer most likely to use basing-point pricing?

Correct AnswerverifiedShow Answer

Your local instant photocopying service charges 10 cents a copy up to 25 copies,9 cents a copy for 26 to 99 copies,and 8 cents a copy for 100 copies or more.What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

Correct AnswerverifiedShow Answer

Give an example of yield management pricing and explain why it is used.

Correct AnswerverifiedYield management pricing is charging dif...View AnswerShow Answer

Target return-on-investment pricing refers to

Correct AnswerverifiedShow Answer

In response to Duracell's introduction of the Duracell Ultra battery,Energizer introduced an Advanced Formula battery.But unlike Duracell,Energizer priced its batteries at a low initial price,believing that consumers were too price sensitive to pay more in this category.In this case,Energizer used

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Setting the price of a product or service by adding a fixed percentage to the total unit cost is referred to as

Correct AnswerverifiedShow Answer

To encourage retailers to pay their bills quickly,manufacturers offer them

Correct AnswerverifiedShow Answer

Prestige pricing refers to

Correct AnswerverifiedShow Answer

After extensive analysis,a mail order company has decided to embark on a policy of multiple-zone pricing.In which step of the price-setting process would the mail order firm have made this decision?

Correct AnswerverifiedShow Answer

Adding a fixed percentage to the cost of all items in a specific product class is referred to as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Standard markup pricing entails adding a...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Yield management pricing is charging dif...
View Answer

Correct Answer
verified

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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