Question 1

Bruno Servers has decided to decrease its prices on its popular higher-range servers. The company can reasonably expect ________ to increase.

Accepted Answer

A)   fixed costs
B)   variable costs
C)   demand
D)   additional value
E)   overhead costsF) A) and B)
G) C) and E)

Question 2

Overhead costs ________ as the number of units produced increases.

Accepted Answer

A)   decrease
B)   increase steadily
C)   fluctuate
D)   remain the same
E)   increase rapidlyF) C) and E)
G) D) and E)

Question 3

When McDonald's and other fast food restaurants offer "value menu" items at surprisingly low prices, they are most likely using ________ pricing.

Accepted Answer

A)   break-even
B)   target profit
C)   good-value
D)   cost-plus
E)   target returnF) D) and E)
G) B) and C)

Question 4

Price decisions must be coordinated with product design, distribution, and promotion decisions to form a consistent and effective integrated marketing mix program.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following processes does value-based pricing reverse?

Accepted Answer

A)   high-low pricing
B)   everyday low pricing
C)   cost-based pricing
D)   good-value pricing
E)   value-added pricingF) A) and B)
G) None of the above

Question 6

Which of the following is true with regard to pure competition?

Accepted Answer

A)   Under pure competition, no single buyer or seller has much effect on the going market price.
B)   In a purely competitive market, marketing research is of utmost importance.
C)   In a purely competitive market, product development is the focus of most firms.
D)   Under pure competition, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price.
E)   Under pure competition, the market consists of only a few large sellers.F) D) and E)
G) B) and D)

Question 7

Explain the concept of the price ceiling.

Accepted Answer

Price ceiling repres...

Question 8

A cell phone manufacturing firm produced 1,000 cell phones a day but believed that it could reasonably step up production to 2,000 cell phones a day. Consequently, it built a larger plant and installed efficient machinery and work arrangements to realize the projected output. Which of the following can most likely be inferred from this information?

Accepted Answer

A)   The unit cost of producing 2,000 cell phones per day would be twice that of the unit cost of producing 1,000 units per day.
B)   A production plant with the capacity of producing 5,000 cell phones a day would be most efficient.
C)   The unit cost of producing 2,000 cell phones per day would be lower than the unit cost of producing 1,000 units per day.
D)   A 2,000-capacity production plant would be less efficient because of increasing diseconomies of scale.
E)   The fixed costs of the firm are more likely to increase with the increase in output.F) A) and D)
G) B) and D)

Question 9

Department stores that practice everyday low pricing typically provide frequent sale days, early-bird savings, and bonus earnings for store credit-card holders.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following involves introducing less-expensive versions of established, brand name products?

Accepted Answer

A)   markup pricing
B)   good-value pricing
C)   time-based pricing
D)   cost-based pricing
E)   target profit pricingF) D) and E)
G) All of the above

Question 11

Under ________, the market consists of many buyers and sellers trading in a uniform commodity.

Accepted Answer

A)   pure competition
B)   monopolistic competition
C)   oligopolistic competition
D)   a pure monopoly
E)   the dominant firm modelF) B) and C)
G) C) and E)

Question 12

As a manufacturer increases the price, ________.

Accepted Answer

A)   efficiency drops
B)   the break-even volume drops
C)   competition is minimized
D)   the total costs increase
E)   the profit margin shrinksF) A) and D)
G) All of the above

Question 13

Azure Air, an airline company, offers attractive prices to customers with tighter budgets. A no-frills airline, it charges for all other additional services, such as baggage handling and in-flight refreshments. Which of the following best describes Azure Air's pricing method?

Accepted Answer

A)   target profit pricing
B)   good-value pricing
C)   cost-based pricing
D)   break-even pricing
E)   penetration pricingF) B) and D)
G) B) and C)

Question 14

List some important characteristics of price.

Accepted Answer

Price is the only element in the marketi...

Question 15

Target return pricing uses the concept of a(n)  ________, which shows the total cost and total revenue expected at different sales volume levels.

Accepted Answer

A)   BCG matrix
B)   break-even chart
C)   SWOT analysis
D)   demand curve
E)   experience curveF) B) and C)
G) A) and D)

Question 16

A break-even chart shows the total cost and total revenue expected at various sales volume levels.

Accepted Answer

A) True 
 B)False

Question 17

Companies with higher costs ________.

Accepted Answer

A)   can drive out competitors through their pricing strategy
B)   intentionally pay higher costs so that they can add value through higher quality and claim higher prices and margins
C)   can set lower prices that result in increased sales though with lower margins
D)   specialize in selling products without value-added features
E)   are more financially successfulF) B) and E)
G) D) and E)

Question 18

Product costs set the ceiling for prices.

Accepted Answer

A) True 
 B)False

Question 19

Distinguish between value-based pricing and cost-based pricing.

Accepted Answer

Customer value-based pricing uses buyers...

Question 20

Factors a company considers in setting its price include all of the following EXCEPT ________.

Accepted Answer

A)   competitors' strategies and prices
B)   product costs
C)   overall marketing strategy and mix
D)   value of the product on the pre-owned market
E)   nature of the market and demandF) D) and E)
G) A) and B)

Exam 10: Pricing: Understanding and Capturing Customer Value

Target return pricing uses the concept of a(n) ________, which shows the total cost and total revenue expected at different sales volume levels.

Correct Answer
verified

When McDonald's and other fast food restaurants offer "value menu" items at surprisingly low prices, they are most likely using ________ pricing.

Correct Answer
verified

Under ________, the market consists of many buyers and sellers trading in a uniform commodity.

Correct Answer
verified

Azure Air, an airline company, offers attractive prices to customers with tighter budgets. A no-frills airline, it charges for all other additional services, such as baggage handling and in-flight refreshments. Which of the following best describes Azure Air's pricing method?

Correct Answer
verified

Factors a company considers in setting its price include all of the following EXCEPT ________.

Correct Answer
verified

Price decisions must be coordinated with product design, distribution, and promotion decisions to form a consistent and effective integrated marketing mix program.

Correct Answer
verified

As a manufacturer increases the price, ________.

Correct Answer
verified

Distinguish between value-based pricing and cost-based pricing.

Correct Answer
verified
Customer value-based pricing uses buyers...
View Answer

Companies with higher costs ________.

Correct Answer
verified

Which of the following processes does value-based pricing reverse?

Correct Answer
verified

Which of the following is true with regard to pure competition?

Correct Answer
verified

Bruno Servers has decided to decrease its prices on its popular higher-range servers. The company can reasonably expect ________ to increase.

Correct Answer
verified

Correct Answer
verified

List some important characteristics of price.

Correct Answer
verified
Price is the only element in the marketi...
View Answer

A break-even chart shows the total cost and total revenue expected at various sales volume levels.

Correct Answer
verified

Which of the following involves introducing less-expensive versions of established, brand name products?

Correct Answer
verified

Overhead costs ________ as the number of units produced increases.

Correct Answer
verified

Product costs set the ceiling for prices.

Correct Answer
verified

Department stores that practice everyday low pricing typically provide frequent sale days, early-bird savings, and bonus earnings for store credit-card holders.

Correct Answer
verified

Explain the concept of the price ceiling.

Correct Answer
verified
Price ceiling repres...
View Answer

Exam 10: Pricing: Understanding and Capturing Customer Value

Target return pricing uses the concept of a(n) ________, which shows the total cost and total revenue expected at different sales volume levels.

Correct AnswerverifiedShow Answer

When McDonald's and other fast food restaurants offer "value menu" items at surprisingly low prices, they are most likely using ________ pricing.

Correct AnswerverifiedShow Answer

Under ________, the market consists of many buyers and sellers trading in a uniform commodity.

Correct AnswerverifiedShow Answer

Azure Air, an airline company, offers attractive prices to customers with tighter budgets. A no-frills airline, it charges for all other additional services, such as baggage handling and in-flight refreshments. Which of the following best describes Azure Air's pricing method?

Correct AnswerverifiedShow Answer

Factors a company considers in setting its price include all of the following EXCEPT ________.

Correct AnswerverifiedShow Answer

Price decisions must be coordinated with product design, distribution, and promotion decisions to form a consistent and effective integrated marketing mix program.

Correct AnswerverifiedShow Answer

As a manufacturer increases the price, ________.

Correct AnswerverifiedShow Answer

Distinguish between value-based pricing and cost-based pricing.

Correct AnswerverifiedCustomer value-based pricing uses buyers...View AnswerShow Answer

Companies with higher costs ________.

Correct AnswerverifiedShow Answer

Which of the following processes does value-based pricing reverse?

Correct AnswerverifiedShow Answer

Which of the following is true with regard to pure competition?

Correct AnswerverifiedShow Answer

Bruno Servers has decided to decrease its prices on its popular higher-range servers. The company can reasonably expect ________ to increase.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

List some important characteristics of price.

Correct AnswerverifiedPrice is the only element in the marketi...View AnswerShow Answer

A break-even chart shows the total cost and total revenue expected at various sales volume levels.

Correct AnswerverifiedShow Answer

Which of the following involves introducing less-expensive versions of established, brand name products?

Correct AnswerverifiedShow Answer

Overhead costs ________ as the number of units produced increases.

Correct AnswerverifiedShow Answer

Product costs set the ceiling for prices.

Correct AnswerverifiedShow Answer

Department stores that practice everyday low pricing typically provide frequent sale days, early-bird savings, and bonus earnings for store credit-card holders.

Correct AnswerverifiedShow Answer

Explain the concept of the price ceiling.

Correct AnswerverifiedPrice ceiling repres...View AnswerShow Answer

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
verified

Correct Answer
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Correct Answer
verified
Customer value-based pricing uses buyers...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Price is the only element in the marketi...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Price ceiling repres...
View Answer