Question 1

Short-run or long-run pricing objectives of achieving a specified return on either sales or investment are called _____.

Accepted Answer

A)  breakeven analysis
B)  tariffs
C)  unfair-trade laws
D)  incremental-cost pricing
E)  profit maximizationF) demandG) value pricingH) monopolyI) elasticityJ) marginalK) fair-trade lawsL) yield managementM) oligopolyN) cost-plus pricingO) full-cost pricingP) supplyQ) marginal analysisR) target-return objectivesS) market-share objectivesT) pure competition

Question 2

Pricing objectives tied directly to meeting prices charged by major competitors emphasize the price element of the marketing mix and focus less strongly on nonprice variables.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following market structures involves a heterogeneous product and product differentiation among competing suppliers,allowing the marketer some degree of control over prices?

Accepted Answer

A)   Pure competition
B)   Monopolistic competition
C)   Complementary monopoly
D)   Monopoly

Question 4

Customary prices are:

Accepted Answer

A)   prices offered at the wholesale level as an incentive to increase product sales.
B)   retail prices consumers expect as a result of tradition and social habit.
C)   prices of products adjusted on the basis of the geographic locations of retail outlets.
D)   prices designed to constrain the amount of products sold to a level desired by the government.

Question 5

Lower off-season prices and higher peak-season prices for lodging at resorts illustrate the use of yield management as a strategy to generate revenues for a largely fixed-cost industry.

Accepted Answer

A) True 
 B)False

Question 6

The A.G.Harding company has been charged with price discrimination under the federal Robinson-Patman Act.Which of the following would be the best defense against the charge?

Accepted Answer

A)   The price differential is justified as they do not exceed the cost differences resulting from selling to various classes of buyers.
B)   The price differential is justified as it reflects the efficiency of its sales personnel.
C)   The price differential is justified because the company is a leader in the specific product market.
D)   The price differential is justified as the company's products comply with the ISO standards.

Question 7

When the elasticity of demand or supply is greater than 1.0,that demand or supply is said to be:

Accepted Answer

A)   elastic.
B)   stagnant.
C)   marginal.
D)   inelastic.

Question 8

Which of the following exemplifies a yield management pricing strategy?

Accepted Answer

A)   Lowering cab rental rates on weekends compared to weekdays
B)   Introducing a pack of oatmeal breakfast cereals at a price of $3 which actually cost $5
C)   Charging an exorbitant price for a designer outfit to signal quality and exclusiveness
D)   Selling a brand of soap at 20 percent discount for a limited time period during its introductory stage

Question 9

A schedule of the amounts of a good or service that firms will offer for sale at different prices during a specified time period is called _____.

Accepted Answer

A)  breakeven analysis
B)  tariffs
C)  unfair-trade laws
D)  incremental-cost pricing
E)  profit maximizationF) demandG) value pricingH) monopolyI) elasticityJ) marginalK) fair-trade lawsL) yield managementM) oligopolyN) cost-plus pricingO) full-cost pricingP) supplyQ) marginal analysisR) target-return objectivesS) market-share objectivesT) pure competition

Question 10

When discounts become normal elements of a competitive marketplace,other marketing mix elements gain importance in purchase decisions.

Accepted Answer

A) True 
 B)False

Question 11

Manufacturers attempt to balance consumer expectations of customary prices with the realities of rising costs by increasing overall product size.

Accepted Answer

A) True 
 B)False

Question 12

Companies can avoid penalties under the Robinson-Patman Act as long as they can demonstrate that their price discounts and promotional allowances restrict competition.

Accepted Answer

A) True 
 B)False

Question 13

A schedule of the amounts of a good or service that will be offered for sale at different prices during a specified period is referred to as _____.

Accepted Answer

A)   demand
B)   supply
C)   surplus
D)   ration

Question 14

A product is priced to sell for $12 with average variable costs of $8.The company expects to earn a profit of $400,000 with its total fixed costs of $120,000.The minimum number of units that must be sold in order to reach this target return is:

Accepted Answer

A)   400,000
B)   130,000
C)   120,000
D)   80,000

Question 15

Explain the two most common cost-oriented pricing procedures: full-cost and incremental-cost.

Accepted Answer

Full-cost pricing uses all relevant vari...

Question 16

Modified breakeven analysis combines the traditional breakeven analysis model with an evaluation of:

Accepted Answer

A)   consumer demand.
B)   marginal cost curves.
C)   supply cost.
D)   target return objectives.

Question 17

Which of the following actions is most likely to be taken by a company in order to implement the value pricing objective?

Accepted Answer

A)   Distributing free samples of the product to create awareness about the product among the consumers
B)   Convincing consumers that the quality of their lower-priced product is the same as that of a comparatively higher-priced product sold by a competitor
C)   Convincing consumers of the prestige associated with the product
D)   Distributing free gifts along with the product during its introductory stage

Question 18

The PIMS project revealed that the two most important factors influencing profitability were:

Accepted Answer

A)   sales cost and market demand.
B)   product quality and market share.
C)   profit margin and product price.
D)   product price and competition.

Question 19

The PIMS project discovered a strong negative relationship between a firm's product quality and its return on investment.

Accepted Answer

A) True 
 B)False

Question 20

The Anti-A&P Act was inspired by price competition triggered by the rise of grocery store chains.

Accepted Answer

A) True 
 B)False

Exam 18: Pricing Concepts

Pricing objectives tied directly to meeting prices charged by major competitors emphasize the price element of the marketing mix and focus less strongly on nonprice variables.

Correct AnswerverifiedShow Answer

Manufacturers attempt to balance consumer expectations of customary prices with the realities of rising costs by increasing overall product size.

Correct AnswerverifiedShow Answer

A product is priced to sell for $12 with average variable costs of $8.The company expects to earn a profit of $400,000 with its total fixed costs of $120,000.The minimum number of units that must be sold in order to reach this target return is:

Correct AnswerverifiedShow Answer

Explain the two most common cost-oriented pricing procedures: full-cost and incremental-cost.

Correct AnswerverifiedFull-cost pricing uses all relevant vari...View AnswerShow Answer

Which of the following exemplifies a yield management pricing strategy?

Correct AnswerverifiedShow Answer

The A.G.Harding company has been charged with price discrimination under the federal Robinson-Patman Act.Which of the following would be the best defense against the charge?

Correct AnswerverifiedShow Answer

A schedule of the amounts of a good or service that will be offered for sale at different prices during a specified period is referred to as _____.

Correct AnswerverifiedShow Answer

Lower off-season prices and higher peak-season prices for lodging at resorts illustrate the use of yield management as a strategy to generate revenues for a largely fixed-cost industry.

Correct AnswerverifiedShow Answer

Which of the following actions is most likely to be taken by a company in order to implement the value pricing objective?

Correct AnswerverifiedShow Answer

The PIMS project revealed that the two most important factors influencing profitability were:

Correct AnswerverifiedShow Answer

When discounts become normal elements of a competitive marketplace,other marketing mix elements gain importance in purchase decisions.

Correct AnswerverifiedShow Answer

Which of the following market structures involves a heterogeneous product and product differentiation among competing suppliers,allowing the marketer some degree of control over prices?

Correct AnswerverifiedShow Answer

Customary prices are:

Correct AnswerverifiedShow Answer

A schedule of the amounts of a good or service that firms will offer for sale at different prices during a specified time period is called _____.

Correct AnswerverifiedShow Answer

Short-run or long-run pricing objectives of achieving a specified return on either sales or investment are called _____.

Correct AnswerverifiedShow Answer

When the elasticity of demand or supply is greater than 1.0,that demand or supply is said to be:

Correct AnswerverifiedShow Answer

Modified breakeven analysis combines the traditional breakeven analysis model with an evaluation of:

Correct AnswerverifiedShow Answer

Companies can avoid penalties under the Robinson-Patman Act as long as they can demonstrate that their price discounts and promotional allowances restrict competition.

Correct AnswerverifiedShow Answer

The PIMS project discovered a strong negative relationship between a firm's product quality and its return on investment.

Correct AnswerverifiedShow Answer

The Anti-A&P Act was inspired by price competition triggered by the rise of grocery store chains.

Correct AnswerverifiedShow Answer

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Full-cost pricing uses all relevant vari...
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