Question 1

Stocking allowances are given to an intermediary to get shelf space for a product.

Accepted Answer

A) True 
 B)False

Question 2

A producer offers a retailer free merchandise to stock a new item. The retailer is receiving a

Accepted Answer

A)   spiff.
B)   cash discount.
C)   seasonal discount.
D)   slotting allowance.
E)   cumulative quantity discount.F) A) and C)
G) C) and D)

Question 3

Which of the following statements about a flexible-price policy is True?

Accepted Answer

A)   Flexible pricing means offering the same price to all customers who purchase under essentially the same conditions and in the same quantities.
B)   The availability of computer pricing databases has had no effect on the popularity of flexible-price policies.
C)   Flexible pricing often involves price negotiation between the buyer and seller.
D)   Flexible pricing does not cause channel conflict.
E)   None of these statements about a flexible-price policy is true.F) A) and E)
G) All of the above

Question 4

Most firms operate in monopolistic competition, where products and whole marketing mixes are not exactly the same.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is a status quo oriented pricing objective?

Accepted Answer

A)   Target return
B)   Unit sales growth
C)   Profit maximization
D)   Growth in market share
E)   Nonprice competitionF) A) and C)
G) B) and E)

Question 6

When Apple first introduced its iPhone in the U.S. market, it priced it at $600. Several months later, Apple reduced the price to $400. And several months after that, it reduced the price again to $200. What pricing policy was Apple using in its initial price strategy?

Accepted Answer

A)   Introductory price
B)   Skimming price
C)   Cash discount price
D)   Penetration price
E)   Everyday low priceF) A) and B)
G) All of the above

Question 7

Which of the following is a profit-oriented pricing objective?

Accepted Answer

A)   Meeting competition
B)   Sales growth
C)   Target return
D)   Nonprice competition
E)   Growth in market shareF) B) and E)
G) A) and E)

Question 8

Careful handling of "trade-ins"-to avoid reducing the list price-is especially important for sellers of:

Accepted Answer

A)   expense items.
B)   raw materials.
C)   emergency products.
D)   component materials.
E)   None of these is a good answer.F) None of the above
G) C) and D)

Question 9

When a buyer receives an invoice for $100 with terms of "2/15 net 30" he can expect to pay:

Accepted Answer

A)   $100 if he pays anytime in the first 30 days.
B)   less than $100 if he pays during the first 15 days.
C)   $100 if he pays anytime during the first fifteen days.
D)   more than $100 if he pays from day fifteen through day thirty.
E)   the full $100 if he waits more than 30 days to pay.F) None of the above
G) A) and B)

Question 10

A value pricer tries to offer a target market the same marketing mix as competitors but with a below-the-market price.

Accepted Answer

A) True 
 B)False

Question 11

A one-price policy means:

Accepted Answer

A)   offering the same price to all customers who purchase products under essentially the same conditions and in the same quantities.
B)   never using temporary sales or rebates.
C)   selling to different customers at different prices.
D)   setting a price at the "right" level from the start and never changing it.
E)   None of these alternatives is correct.F) D) and E)
G) A) and D)

Question 12

In less-developed economies, retail shopkeepers typically use a one-price policy.

Accepted Answer

A) True 
 B)False

Question 13

The term "3/10, net 30" means that thirty percent of the face value of the invoice is due immediately, and that the rest must be paid within 30 days.

Accepted Answer

A) True 
 B)False

Question 14

KeyLine, Inc., engages primarily in the manufacture of touch-sensitive LCD monitors. The company prices its products so that it earns a 20 percent return on investment. Which pricing objective is the company following?

Accepted Answer

A)   Meet competition
B)   Unit sales growth
C)   Nonprice competition
D)   Target return
E)   Share of marketF) D) and E)
G) B) and E)

Question 15

ProEdge Tech, a leading technology firm, has bluntly stated its pricing objective as: "Charge all the traffic will bear." This is an example of a

Accepted Answer

A)   profit maximization objective.
B)   unit sales growth objective.
C)   growth in market share objective.
D)   target return objective.
E)   nonprice competition objective.F) A) and E)
G) B) and C)

Question 16

A manufacturer could try to defend itself against charges of price discrimination under the Robinson-Patman Act by claiming that:

Accepted Answer

A)   the products were not of "like grade and quality."
B)   any price differences were to "meet competition in good faith."
C)   the price differences did not injure competition.
D)   the price differences were justified on the basis of cost differences.
E)   All of these are possible defenses against price discrimination charges.F) B) and C)
G) A) and B)

Question 17

"Zone pricing":

Accepted Answer

A)   allows a uniform delivered price to be charged to all buyers in each zone.
B)   simplifies the calculation of transportation charges.
C)   means making an average freight charge to all buyers within some geographic area.
D)   may make it possible to compete with sellers located closer to the buyer.
E)   All of these alternatives are correct.F) B) and C)
G) D) and E)

Question 18

Many intermediaries seek advertising allowances from manufacturers to help them pay the cost of advertising the products they sell.

Accepted Answer

A) True 
 B)False

Question 19

The Robinson-Patman Act permits promotion allowances only if they are made available to all customers on "proportionately equal terms."

Accepted Answer

A) True 
 B)False

Question 20

A _____ price policy tries to sell the top of the demand curve at a high price before aiming at more price-sensitive customers.

Accepted Answer

A)   meet competition
B)   status quo
C)   penetration
D)   skimming
E)   panningF) B) and C)
G) B) and E)

Exam 16: Pricing Objectives and Policies

The Robinson-Patman Act permits promotion allowances only if they are made available to all customers on "proportionately equal terms."

Correct AnswerverifiedShow Answer

ProEdge Tech, a leading technology firm, has bluntly stated its pricing objective as: "Charge all the traffic will bear." This is an example of a

Correct AnswerverifiedShow Answer

Stocking allowances are given to an intermediary to get shelf space for a product.

Correct AnswerverifiedShow Answer

The term "3/10, net 30" means that thirty percent of the face value of the invoice is due immediately, and that the rest must be paid within 30 days.

Correct AnswerverifiedShow Answer

A value pricer tries to offer a target market the same marketing mix as competitors but with a below-the-market price.

Correct AnswerverifiedShow Answer

Which of the following is a status quo oriented pricing objective?

Correct AnswerverifiedShow Answer

Which of the following is a profit-oriented pricing objective?

Correct AnswerverifiedShow Answer

In less-developed economies, retail shopkeepers typically use a one-price policy.

Correct AnswerverifiedShow Answer

Many intermediaries seek advertising allowances from manufacturers to help them pay the cost of advertising the products they sell.

Correct AnswerverifiedShow Answer

Which of the following statements about a flexible-price policy is True?

Correct AnswerverifiedShow Answer

"Zone pricing":

Correct AnswerverifiedShow Answer

KeyLine, Inc., engages primarily in the manufacture of touch-sensitive LCD monitors. The company prices its products so that it earns a 20 percent return on investment. Which pricing objective is the company following?

Correct AnswerverifiedShow Answer

A producer offers a retailer free merchandise to stock a new item. The retailer is receiving a

Correct AnswerverifiedShow Answer

When Apple first introduced its iPhone in the U.S. market, it priced it at $600. Several months later, Apple reduced the price to $400. And several months after that, it reduced the price again to $200. What pricing policy was Apple using in its initial price strategy?

Correct AnswerverifiedShow Answer

Careful handling of "trade-ins"-to avoid reducing the list price-is especially important for sellers of:

Correct AnswerverifiedShow Answer

A manufacturer could try to defend itself against charges of price discrimination under the Robinson-Patman Act by claiming that:

Correct AnswerverifiedShow Answer

A _____ price policy tries to sell the top of the demand curve at a high price before aiming at more price-sensitive customers.

Correct AnswerverifiedShow Answer

A one-price policy means:

Correct AnswerverifiedShow Answer

Most firms operate in monopolistic competition, where products and whole marketing mixes are not exactly the same.

Correct AnswerverifiedShow Answer

When a buyer receives an invoice for $100 with terms of "2/15 net 30" he can expect to pay:

Correct AnswerverifiedShow Answer

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