Question 1

Which of the following statements regarding market share pricing objectives is most accurate?

Accepted Answer

A)  A market share pricing objective is often difficult for product managers since stockholders are looking for immediate profits and obtaining market share usually takes time.
B)  Although increased market share is a primary goal of some firms, others see it as a means to other ends such as increased sales or profits.
C)  Selecting market share as a pricing objective is particularly effective if industry sales are beginning to rise or peak.
D)  An advantage of market share as a pricing objective is that it is particularly insensitive to competitors' actions.
E)  Ironically, market share pricing objectives are obtained by raising prices in order to increase consumer confidence during the decline stage of a product's life cycle.F) None of the above
G) C) and D)

Question 2

Hallmark was the official supplier of flowers at the last Winter Olympics.It was the first time that it has participated in the Olympics.Hallmark presented each Olympic winner with a special bouquet of roses designed to resemble the Olympic torch.Consumers were able to buy a smaller version of this same bouquet at the Hallmark Web site for $74.95.The Olympic bouquet that consumers could buy contains two dozen yellow roses, yet you can buy two dozen yellow roses for less than $35 at most supermarkets.If Hallmark is treating the Olympic bouquet as an innovative product, then it is using which demand-oriented approach to pricing?

Accepted Answer

A)  bundle pricing
B)  skimming pricing
C)  penetration pricing
D)  yield management pricing
E)  target return-on-sales pricingF) B) and C)
G) B) and D)

Question 3

The practice of changing a very low price for a product with the intent of driving competitors out of business is referred to as

Accepted Answer

A)  price fixing.
B)  price discrimination.
C)  predatory pricing.
D)  deceptive pricing.
E)  geographical pricing.F) A) and E)
G) A) and C)

Question 4

When Sherman bought gas, he noticed the convenience store offered him a 3 percent reduction in price if he paid cash rather than used his credit card.The convenience store was offering him a

Accepted Answer

A)  trade discount.
B)  cash discount.
C)  promotional allowance.
D)  rebate.
E)  functional discount.F) A) and D)
G) A) and E)

Question 5

A trade-in allowance refers to a(n)

Accepted Answer

A)  exchange of one product for another of equal or greater value without an exchange of cash.
B)  cash back exchange when a more expensive item is replaced with a less expensive item.
C)  price reduction given when a used product is part of the payment on a new product.
D)  price reduction given when a used product is part of the payment for a large ticket item or bulk purchase.
E)  price reduction given in exchange when a used product is part of the payment provided the older product is of the same make and model of the newer product.F) A) and B)
G) A) and E)

Question 6

Predatory pricing refers to

Accepted Answer

A)  a conspiracy among firms to set prices for a product.
B)  using price differentials when charging different prices on the basis of race, religion, or ethnic affiliation.
C)  the practice of changing a very low price for a product with the intent of driving competitors out of business.
D)  using price differentials when charging the original price for goods that have been damaged but repaired according to company specifications.
E)  controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price.F) D) and E)
G) A) and E)

Question 7

Pricing constraints refer to

Accepted Answer

A)  barriers that must be overcome in order to set pricing objectives.
B)  competitive pricing advantages one firm has over another.
C)  different pricing strategies for each of the firm's products.
D)  factors that limit the range of prices a firm may set.
E)  another name for demand curves.F) A) and B)
G) C) and D)

Question 8

Three different objectives relate to a firm's profit, which is often measured in terms of return on investment (ROI) .These objectives have different implications for pricing strategy.The three objectives include managing for long-run profits; maximizing current profit objectives, and _________.

Accepted Answer

A)  a target return
B)  break-even recovery
C)  profit reinvestment
D)  profit redistribution
E)  target equalizationF) B) and E)
G) A) and B)

Question 9

In the cash discount $500 4/10 net 30, the number 10 refers to

Accepted Answer

A)  the percentage discounted if the bill is paid within 30 days.
B)  the percentage increase in price if the bill is not paid within 10days.
C)  the number of days for which the discount is valid.
D)  the discount in dollars per unit awarded if the order is paid on time.
E)  the penalty in dollars in dollars if the bill is not paid within 10days.F) C) and E)
G) D) and E)

Question 10

Reductions in unit costs for a larger order are referred to as

Accepted Answer

A)  promotional allowances.
B)  quantity discounts.
C)  one-price policy prices.
D)  penetration prices.
E)  size of order allowances.F) C) and E)
G) B) and E)

Question 11

FIGURE 12-1 
-Figure 12-1 above represents the four approaches for selecting an appropriate price level.Cubicle "D" represents which approach to finding the approximate price level according to the items listed in the cell?

Accepted Answer

A)  demand-oriented approach
B)  cost-oriented approach
C)  profit-oriented approach
D)  competition-oriented approach
E)  profit-equation approachF) B) and C)
G) D) and E) D

Question 12

When buying a car, __________ may result in discriminatory practices.

Accepted Answer

A)  fixed pricing
B)  one pricing
C)  flexible pricing
D)  trade pricing
E)  discount pricingF) A) and E)
G) A) and D)

Question 13

North America's fastest-growing HDTV and consumer electronics company is

Accepted Answer

A)  Samsung.
B)  Phillips.
C)  LG.
D)  Sony.
E)  Vizio.F) A) and E)
G) A) and B) E

Question 14

FIGURE 12-11 
-What type of discount can Payless offer its channel members to sell sandals (Figure 12-11 above)  during the winter months?

Accepted Answer

A)  noncumulative discounts.
B)  cumulative discounts.
C)  functional discounts
D)  seasonal discounts.
E)  trade discounts.F) B) and D)
G) B) and E)

Question 15

A firm's profit equation demonstrates that profit equals _________, or _________.

Accepted Answer

A)  Total cost + Total revenue; (Unit price x Quantity sold) -(Fixed cost + Variable cost) 
B)  Total revenue-Total cost; (Unit price x Quantity sold) -(Fixed cost + Variable cost) 
C)  Total cost-Marginal cost; (Fixed cost + Variable cost)  /(Unit price x Quantity sold) 
D)  Total cost-Variable cost; (Fixed cost + Variable cost)  + (Unit price x Quantity sold) 
E)  Total revenue + Total cost; (Unit price x Quantity sold) -(Fixed cost + Variable cost) F) C) and D)
G) All of the above

Question 16

A shift in the demand curve is illustrated by which of the following?

Accepted Answer

A)  When prices remain the same, there is an increase or decrease in demand.
B)  When prices remain the same, there is a significant decrease in demand.
C)  As the price is raised, the quantity demanded increases, assuming all else stays the same.
D)  As the price is lowered, the quantity demanded increases, assuming all else stays the same.
E)  Movement along the curve rather than a shift of the curve indicates that some significant event has taken place outside the organization that has affected demand.F) B) and C)
G) A) and B)

Question 17

When is skimming pricing an effective strategy?

Accepted Answer

Skimming pricing is an effective strateg...

Question 18

Washburn Guitars broke their guitars into four distinct market segments.Each segment would be priced accordingly.Their batch-custom products instruments were intended to appeal to

Accepted Answer

A)  first-time buyers.
B)  professional musicians.
C)  stars and famous musicians.
D)  large institutional buys such as band programs.
E)  intermediate skill players who might (or might not)  become professional musicians.F) A) and B)
G) C) and D)

Question 19

Price deals that mislead consumers fall into the category of

Accepted Answer

A)  predatory pricing.
B)  deceptive pricing.
C)  price discrimination.
D)  buyer beware.
E)  base point pricing.F) All of the above
G) A) and C) B

Question 20

A demand curve graph typically appears as

Accepted Answer

A)  a parabola with the apex representing the highest price that can be charged without losing customers.
B)  as an inverted parabola with the lowest point representing the lowest price that can be charged and still meet the company's profit objectives.
C)  a diagonal line going from top left to bottom right demonstrating that as price goes down, demand goes up.
D)  a diagonal line going from lower left to upper right demonstrating that as prices go up, demand goes up proportionately.
E)  two intersecting lines that identify the point at which supply and demand are exactly the same.F) All of the above
G) None of the above

Exam 12: Pricing Products and Services

Which of the following statements regarding market share pricing objectives is most accurate?

Correct Answer
verified

Correct Answer
verified

The practice of changing a very low price for a product with the intent of driving competitors out of business is referred to as

Correct Answer
verified

When Sherman bought gas, he noticed the convenience store offered him a 3 percent reduction in price if he paid cash rather than used his credit card.The convenience store was offering him a

Correct Answer
verified

A trade-in allowance refers to a(n)

Correct Answer
verified

Predatory pricing refers to

Correct Answer
verified

Pricing constraints refer to

Correct Answer
verified

Three different objectives relate to a firm's profit, which is often measured in terms of return on investment (ROI) .These objectives have different implications for pricing strategy.The three objectives include managing for long-run profits; maximizing current profit objectives, and _________.

Correct Answer
verified

In the cash discount $500 4/10 net 30, the number 10 refers to

Correct Answer
verified

Reductions in unit costs for a larger order are referred to as

Correct Answer
verified

FIGURE 12-1 -Figure 12-1 above represents the four approaches for selecting an appropriate price level.Cubicle "D" represents which approach to finding the approximate price level according to the items listed in the cell?

Correct Answer
verified
D

When buying a car, __________ may result in discriminatory practices.

Correct Answer
verified

North America's fastest-growing HDTV and consumer electronics company is

Correct Answer
verified
E

FIGURE 12-11 -What type of discount can Payless offer its channel members to sell sandals (Figure 12-11 above) during the winter months?

Correct Answer
verified

A firm's profit equation demonstrates that profit equals _, or _.

Correct Answer
verified

A shift in the demand curve is illustrated by which of the following?

Correct Answer
verified

When is skimming pricing an effective strategy?

Correct Answer
verified
Skimming pricing is an effective strateg...
View Answer

Washburn Guitars broke their guitars into four distinct market segments.Each segment would be priced accordingly.Their batch-custom products instruments were intended to appeal to

Correct Answer
verified

Price deals that mislead consumers fall into the category of

Correct Answer
verified
B

A demand curve graph typically appears as

Correct Answer
verified

Exam 12: Pricing Products and Services

Which of the following statements regarding market share pricing objectives is most accurate?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The practice of changing a very low price for a product with the intent of driving competitors out of business is referred to as

Correct AnswerverifiedShow Answer

When Sherman bought gas, he noticed the convenience store offered him a 3 percent reduction in price if he paid cash rather than used his credit card.The convenience store was offering him a

Correct AnswerverifiedShow Answer

A trade-in allowance refers to a(n)

Correct AnswerverifiedShow Answer

Predatory pricing refers to

Correct AnswerverifiedShow Answer

Pricing constraints refer to

Correct AnswerverifiedShow Answer

Three different objectives relate to a firm's profit, which is often measured in terms of return on investment (ROI) .These objectives have different implications for pricing strategy.The three objectives include managing for long-run profits; maximizing current profit objectives, and _________.

Correct AnswerverifiedShow Answer

In the cash discount $500 4/10 net 30, the number 10 refers to

Correct AnswerverifiedShow Answer

Reductions in unit costs for a larger order are referred to as

Correct AnswerverifiedShow Answer

FIGURE 12-1 -Figure 12-1 above represents the four approaches for selecting an appropriate price level.Cubicle "D" represents which approach to finding the approximate price level according to the items listed in the cell?

Correct AnswerverifiedD

When buying a car, __________ may result in discriminatory practices.

Correct AnswerverifiedShow Answer

North America's fastest-growing HDTV and consumer electronics company is

Correct AnswerverifiedE

FIGURE 12-11 -What type of discount can Payless offer its channel members to sell sandals (Figure 12-11 above) during the winter months?

Correct AnswerverifiedShow Answer

A firm's profit equation demonstrates that profit equals _________, or _________.

Correct AnswerverifiedShow Answer

A shift in the demand curve is illustrated by which of the following?

Correct AnswerverifiedShow Answer

When is skimming pricing an effective strategy?

Correct AnswerverifiedSkimming pricing is an effective strateg...View AnswerShow Answer

Washburn Guitars broke their guitars into four distinct market segments.Each segment would be priced accordingly.Their batch-custom products instruments were intended to appeal to

Correct AnswerverifiedShow Answer

Price deals that mislead consumers fall into the category of

Correct AnswerverifiedB

A demand curve graph typically appears as

Correct AnswerverifiedShow 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
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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
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D

Correct Answer
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Correct Answer
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E

Correct Answer
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A firm's profit equation demonstrates that profit equals _, or _.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Skimming pricing is an effective strateg...
View Answer

Correct Answer
verified

Correct Answer
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B

Correct Answer
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