Question 1

Which term describes factors that affect price and include: newness of the product, whether it is part of a product line, and cost of changing a price?

Accepted Answer

A)  price fixings
B)  pricing constraints
C)  price elasticities
D)  pricing demands
E)  pricing marginsF) A) and B)
G) A) and C)

Question 2

FIGURE 12-8 
-Figure 12-8 above represents the final three generalized steps in the pricing process.Assume pricing objectives and constraints, estimating demand and revenue, determining the cost, volume, and profit relationships have been completed prior to these last steps.Accordingly, at this point cell "A" represents the step at which a firm would

Accepted Answer

A)  determine any runaway costs that could transpire.
B)  determine the financial viability of the company.
C)  scan competitors for price lines for similar products or service.
D)  ensure that legal and regulatory constraints can be adhered to.
E)  select an appropriate price level.F) A) and E)
G) C) and D)

Question 3

What type of discounts are given by manufactures to buyers to encourage them to take stock inventory earlier than their normal demand would require?

Accepted Answer

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

Question 4

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

Accepted Answer

A)  Pricing objectives should never change.
B)  Pricing objectives may change depending upon the relative market share of competitors.
C)  Pricing objectives involve the day-to-day operations of the finance department, the marketing department, and production.
D)  Pricing objectives may change depending on the financial position of the company, the segments in which it does business, including the country in which the product is sold.
E)  Pricing objectives are extremely sensitive to even the slightest change in the local economy.F) A) and E)
G) B) and C)

Question 5

Customary pricing refers to

Accepted Answer

A)  a pricing method where the price the seller quotes includes all transportation costs.
B)  setting the same price for similar customers who buy the same product and quantities under the same conditions.
C)  deliberately selling a product below its list price to attract attention to it.
D)  setting a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors.
E)  pricing oriented on what the market will bear.F) None of the above
G) B) and D)

Question 6

Total revenue refers to

Accepted Answer

A)  the profit made from selling products or services.
B)  the net gain in revenue if units prices are lowered but sales increase.
C)  the least number of units sold to cover product, distribution, and promotional costs.
D)  the amount by which marginal costs exceed fixed costs.
E)  the total money received from the sale of a product.F) A) and B)
G) A) and E)

Question 7

Jane Westerlund owns a picture-framing shop, The Caplow Co.The average price she receives for a picture she frames for a customer is $120.This price must cover her average costs for a typical framed picture of $5 for glass, $2 for matting, and $13 for the frame, and $30 for the labor involved.She must also cover monthly expenses of $1,000 for rent and insurance, $200 for heat and electricity, $500 for advertising, and $3,500 for her salary.Assuming everything else stays the same, if Jane Westerlund increased the average price charged for a framed picture, in a break-even chart this would cause the slope of the total revenue curve to __________ and the break-even quantity to __________.

Accepted Answer

A)  increase; increase
B)  increase; decrease
C)  decrease; decrease
D)  decrease; increase
E)  stay the same; increaseF) A) and E)
G) A) and D)

Question 8

The sum of the expenses of the firm that vary directly with the quantity of the product that is produced and sold is referred to as

Accepted Answer

A)  fixed cost.
B)  total cost.
C)  marginal cost.
D)  administrative cost.
E)  variable cost.F) A) and E)
G) A) and D)

Question 9

Give an example of yield management pricing and explain why it is used.

Accepted Answer

Yield management pricing is charging dif...

Question 10

Which of the following statements regarding trade-in allowance is most accurate?

Accepted Answer

A)  Trade-ins are exchanges of one product for another of equal or greater value without an exchange of cash.
B)  Trade-ins are an effective way to lower the price a buyer has to pay without formally reducing the list price.
C)  A trade-in allowance is only effective when an expensive item is replaced with a less expensive item.
D)  Trade in allowances are used almost exclusively with large ticket item and bulk purchases.
E)  Trade-in allowances should only be given when the older product is of the same make and model of the newer product.F) A) and B)
G) C) and D)

Question 11

The use of "special fees" and "surcharges" is driven by consumers' zeal for __________ and the ease of making price comparisons on the Internet.

Accepted Answer

A)  high prices
B)  low prices
C)  warranties
D)  extra accessories
E)  service contractsF) A) and E)
G) None of the above

Question 12

When Pizza Hut announced it was going to add 25 percent more toppings to its Meat Lover's Line of pizzas without increasing the price, what consumer motivation was it appealing to?

Accepted Answer

A)  cost
B)  appearance
C)  tangibles
D)  value
E)  prestigeF) A) and B)
G) C) and E)

Question 13

Mrs.Renfro's, Inc., is a company that sells 25 different relishes in 45 different states.Mrs.Renfro's chipotle corn salsa is so popular that the company cannot make enough to keep its resellers stocked.Its price of $4.50 for a jar seems just right to consumers who savor its hot and spicy taste.The popularity of hot and spicy food is an example of a(n)  _________ that Mrs.Renfro's has used to make its product a success.

Accepted Answer

A)  exchange parameter
B)  demand factor
C)  supply factor
D)  consumer index
E)  macroeconomic environmental factorF) A) and D)
G) A) and E)

Question 14

Unit variable cost refers to

Accepted Answer

A)  variable cost expressed as the sum of all units sold.
B)  variable cost expressed as a percentage of total sales.
C)  variable cost expressed on a per unit basis for a product.
D)  variable cost expressed as a percentage of fixed costs.
E)  variable cost expressed as a percentage of total profit.F) C) and E)
G) C) and D)

Question 15

Yield management pricing is a form of

Accepted Answer

A)  fixed pricing.
B)  loss-leader pricing.
C)  flexible-pricing.
D)  customary pricing.
E)  price lining.F) A) and C)
G) C) and D)

Question 16

FIGURE 12-6 
-Which of the following statements most likely would account for the shift in the demand curve shown in Figure 12-6 above?

Accepted Answer

A)  The firm increased its prices and the value of the product was perceived to be greater.
B)  There were more product substitutes available in the marketplace.
C)  Competitors in the market lowered their prices.
D)  A downward economic shift caused proportionate changes in consumer income.
E)  The firm's price remained the same but changes occurred in consumer tastes.F) A) and B)
G) D) and E)

Question 17

FIGURE 12-1 
-Figure 12-1 above represents the four approaches for selecting an appropriate price level.Cubicle "C" 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) A) and E)
G) A) and D)

Question 18

There are a lot of skateboards on the market, but the BMW Streetcarver is the only one with stabilizers and wheel design based on BMW's automobile.This technology gives the BMW Streetcarver better control at high speeds and around sharp turns than any other brand.The skateboard is priced at $495, which leaves many consumers (especially young males)  who might want to buy the Streetcarver unable to afford it.This inability to pay for the high-priced BMW-made skateboard shows the affect of _________ on sales.

Accepted Answer

A)  demand factors
B)  macroeconomic environmental factors
C)  the consumer index
D)  supply factors
E)  exchange parametersF) A) and D)
G) D) and E)

Question 19

As the brand manager for Cracker Jack, what information does Figure 12-4 above give you?

Accepted Answer

A)  You have a price premium relative to Crunch 'n Munch.
B)  Crunch 'n Munch has a price premium relative to Cracker Jack.
C)  Fiddle Faddle is priced higher than Crunch 'n Munch.
D)  Private Brands sell more product than Cracker Jack.
E)  Seasonal, specialty, and regional brands have the lowest market share.F) B) and D)
G) C) and D)

Question 20

When microwave ovens were in the introduction stage of the product life cycle, some consumers were willing to pay exorbitant prices for the innovative ovens.Taking advantage of this strong customer desire, marketers set the price for microwave ovens at the highest initial price that customers with a strong desire for the product were willing to pay.Marketers of microwave ovens were using a _________ pricing strategy.

Accepted Answer

A)  skimming
B)  penetration
C)  prestige
D)  price lining
E)  bundleF) A) and C)
G) B) and C)

Exam 12: Pricing Products and Services

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

Correct Answer
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Correct Answer
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Total revenue refers to

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

Correct Answer
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Unit variable cost refers to

Correct Answer
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Yield management pricing is a form of

Correct Answer
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Which of the following statements regarding trade-in allowance is most accurate?

Correct Answer
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As the brand manager for Cracker Jack, what information does Figure 12-4 above give you?

Correct Answer
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Customary pricing refers to

Correct Answer
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When Pizza Hut announced it was going to add 25 percent more toppings to its Meat Lover's Line of pizzas without increasing the price, what consumer motivation was it appealing to?

Correct Answer
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FIGURE 12-6 -Which of the following statements most likely would account for the shift in the demand curve shown in Figure 12-6 above?

Correct Answer
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Correct Answer
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The sum of the expenses of the firm that vary directly with the quantity of the product that is produced and sold is referred to as

Correct Answer
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Which term describes factors that affect price and include: newness of the product, whether it is part of a product line, and cost of changing a price?

Correct Answer
verified

Give an example of yield management pricing and explain why it is used.

Correct Answer
verified
Yield management pricing is charging dif...
View Answer

Correct Answer
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Correct Answer
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What type of discounts are given by manufactures to buyers to encourage them to take stock inventory earlier than their normal demand would require?

Correct Answer
verified

Correct Answer
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The use of "special fees" and "surcharges" is driven by consumers' zeal for __________ and the ease of making price comparisons on the Internet.

Correct Answer
verified

Exam 12: Pricing Products and Services

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Total revenue refers to

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Unit variable cost refers to

Correct AnswerverifiedShow Answer

Yield management pricing is a form of

Correct AnswerverifiedShow Answer

Which of the following statements regarding trade-in allowance is most accurate?

Correct AnswerverifiedShow Answer

As the brand manager for Cracker Jack, what information does Figure 12-4 above give you?

Correct AnswerverifiedShow Answer

Customary pricing refers to

Correct AnswerverifiedShow Answer

When Pizza Hut announced it was going to add 25 percent more toppings to its Meat Lover's Line of pizzas without increasing the price, what consumer motivation was it appealing to?

Correct AnswerverifiedShow Answer

FIGURE 12-6 -Which of the following statements most likely would account for the shift in the demand curve shown in Figure 12-6 above?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The sum of the expenses of the firm that vary directly with the quantity of the product that is produced and sold is referred to as

Correct AnswerverifiedShow Answer

Which term describes factors that affect price and include: newness of the product, whether it is part of a product line, and cost of changing a price?

Correct AnswerverifiedShow Answer

Give an example of yield management pricing and explain why it is used.

Correct AnswerverifiedYield management pricing is charging dif...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What type of discounts are given by manufactures to buyers to encourage them to take stock inventory earlier than their normal demand would require?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The use of "special fees" and "surcharges" is driven by consumers' zeal for __________ and the ease of making price comparisons on the Internet.

Correct AnswerverifiedShow Answer

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Yield management pricing is charging dif...
View Answer

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