Question 1

After selecting a pricing strategy, what is the next step in the establishment of prices?

Accepted Answer

A)  Developing pricing objectives
B)  Determining a specific price
C)  Assessing the target market's evaluation of price
D)  Selecting a basis for pricing
E)  Evaluating competitors' pricesF) None of the above
G) A) and B)

Question 2

The way marketers use pricing in the marketing mix will affect the final price.

Accepted Answer

A) True 
 B)False

Question 3

Suppose that the frozen foods division of Amy's purchases food trays and boxes from the packaging division. The form of pricing used to charge the frozen foods division is called

Accepted Answer

A)  geographic pricing.
B)  base-point pricing.
C)  business-unit pricing.
D)  transfer pricing.
E)  price discrimination.F) B) and E)
G) A) and C)

Question 4

Penetration pricing is one new-product pricing approach that provides the most flexible introductory price.

Accepted Answer

A) True 
 B)False

Question 5

Some stores employ comparison shoppers to learn what prices their competitors are charging.

Accepted Answer

A) True 
 B)False

Question 6

Some grocery stores collect data on competitive prices

Accepted Answer

A)  by calling their competitors.
B)  on a quarterly basis.
C)  through stores' purchase data.
D)  from their resellers.
E)  by using comparison shoppers.F) A) and E)
G) All of the above

Question 7

The federal government often uses ____ pricing when it grants defense contracts.

Accepted Answer

A)  markup
B)  differential
C)  breakeven
D)  cost-plus
E)  competition-basedF) All of the above
G) A) and C)

Question 8

Under Armour is establishing a ______ pricing objective to maintain or increase its product's sales in relation to total industry sales.

Accepted Answer

A)  return on investment
B)  survival
C)  product quality
D)  market share
E)  status quoF) A) and C)
G) A) and E)

Question 9

Grocery stores use negotiated pricing strategies.

Accepted Answer

A) True 
 B)False

Question 10

The firm should produce the quantity at which marginal revenue and marginal cost are equal.

Accepted Answer

A) True 
 B)False

Question 11

If Nabisco wants to quickly gain a large market share with its new line of reduced-fat snack crackers, it should use

Accepted Answer

A)  penetration pricing.
B)  random discounting.
C)  captive pricing.
D)  price skimming.
E)  everyday low prices.F) A) and B)
G) None of the above

Question 12

A market share objective

Accepted Answer

A)  is not recommended when sales for the total industry are declining.
B)  is not especially useful when sales for the total industry are increasing.
C)  is not especially useful when sales for the total industry are flat.
D)  is useful primarily in an industry where total sales are increasing.
E)  can be used effectively whether total industry sales are rising or falling.F) A) and D)
G) A) and C)

Question 13

The Panama Jack Company utilizes a special strategy to sell its ECO-shirt line. Its basic promotional tool is the discount. These discounts offered to middlemen for performing certain channel activities are referred to as ____ discounts.

Accepted Answer

A)  trade
B)  cumulative
C)  noncumulative
D)  push
E)  intermediaryF) B) and C)
G) A) and C)

Question 14

Which of the following statements about price elasticity is false?

Accepted Answer

A)  Steak is an example of a product that has an elastic demand for most people, because when price goes up quantity demanded goes down proportionally.
B)  Elasticity of demand is the relative responsiveness of a change in quantity demanded to changes in price.
C)  If marketers can determine price elasticity, then setting prices at optimum levels is much easier.
D)  When price is raised on a product that has an inelastic demand, then total revenue will decrease.
E)  A product like electricity has an inelastic demand.F) All of the above
G) A) and B)

Question 15

A pricing strategy is a course of action designed to achieve pricing and marketing objectives.

Accepted Answer

A) True 
 B)False

Question 16

Dividing the percentage change in quantity demanded by the percentage change in price gives the

Accepted Answer

A)  prestige demand curve.
B)  breakeven point.
C)  marginal cost curve.
D)  price sensitivity curve.
E)  price elasticity of demand.F) B) and D)
G) None of the above

Question 17

The government frequently uses competition-based pricing in granting defense contracts.

Accepted Answer

A) True 
 B)False

Question 18

Chris is excited because he has obtained the price list of his company's major competitor. His supervisor, Homer, is also optimistic. However, he has much more experience in the industry than Chris and cautions him that just because they have access to their competitor's price list

Accepted Answer

A)  doesn't mean the list has not been completely fabricated.
B)  doesn't mean their firm will be able to match their competitor's prices.
C)  doesn't mean that knowing competitor prices is important.
D)  doesn't entail actually using the price list when establishing prices.
E)  doesn't mean they reflect the actual prices at which competitive products are sold.F) C) and D)
G) D) and E)

Question 19

If a business decides to reduce its prices once in a while on an unsystematic basis, it is using

Accepted Answer

A)  price reduction planning.
B)  random discounting.
C)  bundle pricing.
D)  periodic discounting.
E)  penetration pricing.F) A) and D)
G) None of the above

Question 20

Saffie is a marketing consultant who specializes in small businesses. Her current client is very interested in estimating the costs for the coming year in order to find the breakeven point. Saffie knows this is an important financial statistic because below the breakeven point, the firm is operating

Accepted Answer

A)  with fixed costs only.
B)  with minimal variable costs.
C)  with no revenue.
D)  with minimal profit.
E)  at a loss.F) A) and B)
G) A) and C)

Exam 12: Pricing Concepts and Management

The Panama Jack Company utilizes a special strategy to sell its ECO-shirt line. Its basic promotional tool is the discount. These discounts offered to middlemen for performing certain channel activities are referred to as ____ discounts.

Correct AnswerverifiedShow Answer

Penetration pricing is one new-product pricing approach that provides the most flexible introductory price.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The firm should produce the quantity at which marginal revenue and marginal cost are equal.

Correct AnswerverifiedShow Answer

A pricing strategy is a course of action designed to achieve pricing and marketing objectives.

Correct AnswerverifiedShow Answer

Dividing the percentage change in quantity demanded by the percentage change in price gives the

Correct AnswerverifiedShow Answer

Chris is excited because he has obtained the price list of his company's major competitor. His supervisor, Homer, is also optimistic. However, he has much more experience in the industry than Chris and cautions him that just because they have access to their competitor's price list

Correct AnswerverifiedShow Answer

The federal government often uses ____ pricing when it grants defense contracts.

Correct AnswerverifiedShow Answer

A market share objective

Correct AnswerverifiedShow Answer

If a business decides to reduce its prices once in a while on an unsystematic basis, it is using

Correct AnswerverifiedShow Answer

If Nabisco wants to quickly gain a large market share with its new line of reduced-fat snack crackers, it should use

Correct AnswerverifiedShow Answer

After selecting a pricing strategy, what is the next step in the establishment of prices?

Correct AnswerverifiedShow Answer

Suppose that the frozen foods division of Amy's purchases food trays and boxes from the packaging division. The form of pricing used to charge the frozen foods division is called

Correct AnswerverifiedShow Answer

Some stores employ comparison shoppers to learn what prices their competitors are charging.

Correct AnswerverifiedShow Answer

Grocery stores use negotiated pricing strategies.

Correct AnswerverifiedShow Answer

Under Armour is establishing a ______ pricing objective to maintain or increase its product's sales in relation to total industry sales.

Correct AnswerverifiedShow Answer

The government frequently uses competition-based pricing in granting defense contracts.

Correct AnswerverifiedShow Answer

Some grocery stores collect data on competitive prices

Correct AnswerverifiedShow Answer

Which of the following statements about price elasticity is false?

Correct AnswerverifiedShow Answer

The way marketers use pricing in the marketing mix will affect the final price.

Correct AnswerverifiedShow Answer

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