Question 1

When Circuit Town Electronics sets its televisions at three price levels of $699,$899,and $1,099,it is most likely using ________.

Accepted Answer

A)  price fixing
B)  price lining
C)  penetration pricing
D)  skimming pricing
E)  loss leader pricingF) B) and E)
G) C) and E)

Question 2

When setting prices,a leading manufacturer of nutritional supplements decided to institute a pricing strategy that would support a five percent increase in sales over the next three years.What type of pricing objective has the company set?

Accepted Answer

A)  profit
B)  sales
C)  competitive effect
D)  cost-plus
E)  valueF) None of the above
G) B) and D)

Question 3

The idea of externalities is the basis of ________.

Accepted Answer

A)  dynamic pricing
B)  e-commerce
C)  freenomics
D)  reserve pricing
E)  price sensitivityF) A) and C)
G) A) and D)

Question 4

Which of the following statements about the break-even point is true?

Accepted Answer

A)  It is used to determine how many more units need to be sold to increase market share by a specific amount.
B)  It is a technique used to calculate fixed costs.
C)  It determines the amount of retained earnings a company will have during an accounting period.
D)  It is a technique marketers use to examine the relationship between supply and demand.
E)  It is calculated using contribution per unit costs and total fixed costs.F) A) and E)
G) A) and D)

Question 5

What is the rationale for a store advertising the sale of one item at a price that may be potentially lower than the cost of the item to the store?

Accepted Answer

The store is using this one sale item as...

Question 6

Cost-based pricing considers factors such as the nature of the target market,demand,competition,and the product life cycle.

Accepted Answer

A) True 
 B)False

Question 7

Whether a firm sells to businesses or directly to consumers,most pricing structures are built around which of the following?

Accepted Answer

A)  distribution costs
B)  channel length
C)  trade discounts
D)  sales promotions
E)  list pricesF) C) and D)
G) C) and E)

Question 8

Which of the following occurs when manufacturers or wholesalers attempt to force retailers to charge a certain price for their products?

Accepted Answer

A)  horizontal price fixing
B)  vertical price fixing
C)  predatory pricing
D)  internal reference pricing
E)  assimilation pricingF) A) and B)
G) A) and D)

Question 9

When consumers are unable to judge the quality of a product through examination or prior experience,they usually do which of the following and assume that the higher-priced product is the higher-quality product?

Accepted Answer

A)  make a price-quality inference
B)  depend on an internal reference price
C)  assess the fair price
D)  experience an assimilation effect
E)  experience a price-placebo effectF) A) and B)
G) A) and C)

Question 10

Which of the following should be true for a skimming price to be successful?

Accepted Answer

A)  Target consumers should be price sensitive.
B)  Supply should exceed demand.
C)  Demand must be stabilizing.
D)  The producer should use intensive distribution.
E)  There should be little chance that competitors can quickly enter the market.F) A) and E)
G) D) and E)

Question 11

Johnson Boats wants to introduce a new model of boat into mature markets in highly developed countries with the goal of quickly gaining mass-market share.As a consultant,you should recommend a ________ pricing strategy.

Accepted Answer

A)  skim
B)  penetration
C)  price leadership
D)  cost-plus
E)  captiveF) A) and B)
G) A) and C)

Question 12

The value of something we give up in order to obtain something else is referred to as a(n) ________.

Accepted Answer

A)  transformation cost
B)  opportunity cost
C)  exchange
D)  variable cost
E)  marginal costF) C) and D)
G) A) and E)

Question 13

Trade or functional discounts are offered by manufacturers to which of the following?

Accepted Answer

A)  channel intermediaries who perform wholesaling tasks that the manufacturer would otherwise have to perform
B)  consumers who earn a price reduction for buying in bulk
C)  intermediaries who pay their bills before they are due
D)  manufacturers that agree to exclusive distribution contracts
E)  the government market and other organizations that require bid proposalsF) A) and E)
G) B) and C)

Question 14

How do consumers benefit from price bundling? Give an example of price bundling.

Accepted Answer

Several products are sold toge...

Question 15

In a(n) ________,all of the buyers know the highest price bid at any point in time.

Accepted Answer

A)  reverse auction
B)  dynamic auction
C)  open auction
D)  reserve auction
E)  price-lining auctionF) C) and D)
G) A) and E)

Question 16

With target costing,marketers first ________ and then ________.

Accepted Answer

A)  build the marketing mix;identify the target market
B)  identify target markets;set different prices for each market
C)  design the product;determine its cost
D)  use skimming pricing;use penetration pricing
E)  determine a reasonable selling price;target costs to ensure that the price is metF) A) and D)
G) C) and D)

Question 17

________ is a pricing tactic a firm uses for two products that work only when used together.The firm sells one item at a very low price and then makes its profit on the second high-margin item.

Accepted Answer

A)  Two-part pricing
B)  Price bundling
C)  Captive pricing
D)  Penetration pricing
E)  Skim pricingF) A) and B)
G) C) and E)

Question 18

Valeo Fashions has just introduced a new line of fashion dresses for teens.The line will initially enter the market at high prices in a ________ strategy.

Accepted Answer

A)  penetration pricing
B)  skimming pricing
C)  price leadership
D)  yield management pricing
E)  value pricingF) A) and E)
G) A) and B)

Question 19

Lawyers,accountants,and other professionals typically price by adding a standard markup for profit.This is known as ________.

Accepted Answer

A)  target costing
B)  value pricing
C)  cost-plus pricing
D)  break-even pricing
E)  penetration pricingF) B) and E)
G) C) and D)

Question 20

What is the first step a marketer should take to estimate a product's potential sales?

Accepted Answer

A)  determine maximum production levels
B)  conduct a survey of buyers' intentions
C)  estimate total demand for the product in the market
D)  determine how to expand market share
E)  predict the company's market shareF) A) and D)
G) All of the above

Exam 11: Price the Product

When Circuit Town Electronics sets its televisions at three price levels of $699,$899,and $1,099,it is most likely using ________.

Correct AnswerverifiedShow Answer

The value of something we give up in order to obtain something else is referred to as a(n) ________.

Correct AnswerverifiedShow Answer

Lawyers,accountants,and other professionals typically price by adding a standard markup for profit.This is known as ________.

Correct AnswerverifiedShow Answer

The idea of externalities is the basis of ________.

Correct AnswerverifiedShow Answer

________ is a pricing tactic a firm uses for two products that work only when used together.The firm sells one item at a very low price and then makes its profit on the second high-margin item.

Correct AnswerverifiedShow Answer

What is the first step a marketer should take to estimate a product's potential sales?

Correct AnswerverifiedShow Answer

Cost-based pricing considers factors such as the nature of the target market,demand,competition,and the product life cycle.

Correct AnswerverifiedShow Answer

Whether a firm sells to businesses or directly to consumers,most pricing structures are built around which of the following?

Correct AnswerverifiedShow Answer

Valeo Fashions has just introduced a new line of fashion dresses for teens.The line will initially enter the market at high prices in a ________ strategy.

Correct AnswerverifiedShow Answer

Trade or functional discounts are offered by manufacturers to which of the following?

Correct AnswerverifiedShow Answer

Johnson Boats wants to introduce a new model of boat into mature markets in highly developed countries with the goal of quickly gaining mass-market share.As a consultant,you should recommend a ________ pricing strategy.

Correct AnswerverifiedShow Answer

With target costing,marketers first ________ and then ________.

Correct AnswerverifiedShow Answer

How do consumers benefit from price bundling? Give an example of price bundling.

Correct AnswerverifiedSeveral products are sold toge...View AnswerShow Answer

When consumers are unable to judge the quality of a product through examination or prior experience,they usually do which of the following and assume that the higher-priced product is the higher-quality product?

Correct AnswerverifiedShow Answer

When setting prices,a leading manufacturer of nutritional supplements decided to institute a pricing strategy that would support a five percent increase in sales over the next three years.What type of pricing objective has the company set?

Correct AnswerverifiedShow Answer

What is the rationale for a store advertising the sale of one item at a price that may be potentially lower than the cost of the item to the store?

Correct AnswerverifiedThe store is using this one sale item as...View AnswerShow Answer

Which of the following should be true for a skimming price to be successful?

Correct AnswerverifiedShow Answer

In a(n) ________,all of the buyers know the highest price bid at any point in time.

Correct AnswerverifiedShow Answer

Which of the following occurs when manufacturers or wholesalers attempt to force retailers to charge a certain price for their products?

Correct AnswerverifiedShow Answer

Which of the following statements about the break-even point is true?

Correct AnswerverifiedShow Answer

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With target costing,marketers first and then .

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Several products are sold toge...
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The store is using this one sale item as...
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