Question 1

Marketing managers often use break-even analysis to analyze the relationship between total revenue and total cost to determine profitability at various levels of output. What is the break-even formula? Use the formula to calculate how many radio-controlled drones a dealer must sell if her fixed costs are $100,000, unit variable costs are $150, and the selling price is $200.

Accepted Answer

The break-even point (BEP) is the quanti...

Question 2

The marketplace sets the price for wheat, so farmers who are trying to sell their wheat crops do not need a pricing strategy and do just a little advertising when a crop comes in. The wheat is sold in ________ type of competitive market.

Accepted Answer

A)   an oligopoly
B)   a pure monopoly
C)   a pure competition
D)   a monopolistic competition
E)   a monopolistic oligopolyF) None of the above
G) D) and E)

Question 3

The horizontal axis of a demand curve graph represents

Accepted Answer

A)   market growth rate.
B)   relative market share.
C)   price per unit.
D)   potential profit in dollars.
E)   quantity demanded.F) A) and B)
G) A) and C)

Question 4

Step 1 of the price-setting process identifies pricing objectives and constraints. Describe the reasons these objectives may change and give examples of objectives a firm may set.

Accepted Answer

Pricing objectives involve specifying th...

Question 5

Which of these is an example of a price?

Accepted Answer

A)   fare
B)   operating costs
C)   liquidity
D)   value
E)   brand equityF) A) and B)
G) C) and D)

Question 6

Which of the following would be an example of a constraint in Step 1 of the price-setting process?

Accepted Answer

A)   We can rely on our reputation for our other products in the line.
B)   We expect to make a profit of $1.2 million.
C)   We need to make allowances for large quantity orders.
D)   We should increase the price during the holiday shopping season.
E)   We're going to face some aggressive competition.F) A) and B)
G) A) and E)

Question 7

All of these are examples of pricing constraints exceptwhich?

Accepted Answer

A)   cost of producing the product
B)   competitors' prices
C)   newness of the product
D)   break-even point
E)   demand for the product class, product, or brandF) B) and D)
G) A) and B)

Question 8

Describe the pricing constraints a firm is likely to face.

Accepted Answer

Pricing constraints are factors that lim...

Question 9

A movement along a demand curve (up or down)  for a product occurs ________, assuming that other factors such as consumer tastes, price and availability of substitutes, and consumer incomes remain unchanged.

Accepted Answer

A)   when its price is lowered or increased and the quantity demanded for it correspondingly increases or decreases
B)   when its demand is lowered or increased and the price offered for it correspondingly increases or decreases
C)   when its demand and price are lowered
D)   when its demand and price are increased
E)   at the break-even pointF) A) and B)
G) A) and C)

Question 10

All of the following are demand factors exceptwhich?

Accepted Answer

A)   the price of similar products
B)   consumer tastes
C)   consumer income
D)   the availability of similar products
E)   the form of promotionF) A) and D)
G) A) and C)

Question 11

Total cost refers to

Accepted Answer

A)   the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold.
B)   the change in expenses that results from producing and marketing one additional unit of a product.
C)   the average amount of money received for selling one unit of a product or simply the price of that unit.
D)   the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold.
E)   the total expense incurred by a firm in producing and marketing a product, which equals the sum of fixed cost and variable cost.F) B) and E)
G) B) and D)

Question 12

Most consumers realize that the quality of diamonds varies, and many believe the higher the price of a diamond, the higher its quality. This is an example of price influencing the perception of overall quality and therefore ________ to consumers.

Accepted Answer

A)   acceptable cost
B)   perceptual investment
C)   barter potential
D)   return on investment
E)   valueF) A) and E)
G) C) and D)

Question 13

Products such as disposable diapers usually have

Accepted Answer

A)   elastic demand.
B)   null elasticity.
C)   unitary demand.
D)   inelastic supply.
E)   inelastic demand.F) B) and E)
G) B) and D)

Question 14

Barter is the practice of exchanging products and services for other products and services rather than for

Accepted Answer

A)   value.
B)   ideas.
C)   promises.
D)   tariffs.
E)   money.F) B) and C)
G) A) and E)

Question 15

Companies must know or anticipate what specific prices its present and potential competitors currently charge

Accepted Answer

A)   or may charge in the near future.
B)   only when these are considered permanent prices.
C)   primarily if they intend to compete on price rather than a form of differentiation like customer service.
D)   primarily if they intend to target price-sensitive target markets.
E)   if there are legal requirements for pricing in their industry.F) D) and E)
G) A) and C)

Question 16

In order to deliver a product that the average consumer can afford, VIZIO

Accepted Answer

A)   handles product design and marketing in the United States and relies on contract manufacturers in other countries to build the product.
B)   uses mass customization in other countries and then ships the HDTVs to the United States.
C)   purchased a small company in China to distribute its products under the VIZIO name.
D)   purchased a small company in Japan to distribute its products under the VIZIO name.
E)   relies solely on recycled materials to build high-quality, no-frills products.F) B) and C)
G) A) and B)

Question 17

A target return profit pricing objective implies that a company chooses to

Accepted Answer

A)   set targets whose performance can be measured quickly.
B)   give up immediate profit in exchange for achieving a higher market share in hopes of penetrating competitive markets.
C)   set a profit goal that is often determined by its board of directors.
D)   reduce investment in any further market or product research.
E)   set prices based on return on sales.F) A) and B)
G) A) and C)

Question 18

Washburn Guitars recently purchased Parker Guitar, another guitar manufacturer that designs products for professionals and collectors, and will combine the two production facilities into a new location. Washburn expects the acquisition to reduce its rent and tax expenses by 40 percent, and the new skilled employees will reduce the hours of work needed for each unit by 15 percent. This would cause the slope of the total cost curve to ________ and the break-even quantity to

Accepted Answer

A)   decrease; stay the same.
B)   decrease; increase.
C)   increase; increase.
D)   stay the same; increase.
E)   decrease; decrease.F) B) and E)
G) All of the above

Question 19

A technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output is referred to as

Accepted Answer

A)   break-even analysis.
B)   marginal analysis.
C)   sensitivity analysis.
D)   market analysis.
E)   tipping point analysis.F) B) and C)
G) A) and C)

Question 20

Suppose you are the owner of a picture frame store and you wish to calculate how many frames you must sell to cover your fixed and variable costs at a given price. Let's assume that the demand for your frames is strong, so the average price customers are willing to pay for each picture frame is $120. Also, suppose your fixed costs (FC)  total $32,000 (real estate taxes, interest on a bank loan, etc.)  and unit variable cost (UVC)  for a picture frame is $40 (labor, glass, frame, and matting) . If your picture frame store sold 2,000 picture frames, what would your profit (or loss)  be?

Accepted Answer

A)   a loss of $32,000
B)   $0
C)   $32,000 profit
D)   $112,000 profit
E)   $128,000 profitF) A) and C)
G) B) and C)

Exam 13: Building the Price Foundation

All of the following are demand factors exceptwhich?

Correct Answer
verified

Barter is the practice of exchanging products and services for other products and services rather than for

Correct Answer
verified

Step 1 of the price-setting process identifies pricing objectives and constraints. Describe the reasons these objectives may change and give examples of objectives a firm may set.

Correct Answer
verified
Pricing objectives involve specifying th...
View Answer

Which of these is an example of a price?

Correct Answer
verified

A technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output is referred to as

Correct Answer
verified

All of these are examples of pricing constraints exceptwhich?

Correct Answer
verified

Correct Answer
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Total cost refers to

Correct Answer
verified

Which of the following would be an example of a constraint in Step 1 of the price-setting process?

Correct Answer
verified

In order to deliver a product that the average consumer can afford, VIZIO

Correct Answer
verified

Correct Answer
verified
The break-even point (BEP) is the quanti...
View Answer

Companies must know or anticipate what specific prices its present and potential competitors currently charge

Correct Answer
verified

The horizontal axis of a demand curve graph represents

Correct Answer
verified

Correct Answer
verified

The marketplace sets the price for wheat, so farmers who are trying to sell their wheat crops do not need a pricing strategy and do just a little advertising when a crop comes in. The wheat is sold in ________ type of competitive market.

Correct Answer
verified

Most consumers realize that the quality of diamonds varies, and many believe the higher the price of a diamond, the higher its quality. This is an example of price influencing the perception of overall quality and therefore ________ to consumers.

Correct Answer
verified

Products such as disposable diapers usually have

Correct Answer
verified

A target return profit pricing objective implies that a company chooses to

Correct Answer
verified

Describe the pricing constraints a firm is likely to face.

Correct Answer
verified
Pricing constraints are factors that lim...
View Answer

A movement along a demand curve (up or down) for a product occurs ________, assuming that other factors such as consumer tastes, price and availability of substitutes, and consumer incomes remain unchanged.

Correct Answer
verified

Exam 13: Building the Price Foundation

All of the following are demand factors exceptwhich?

Correct AnswerverifiedShow Answer

Barter is the practice of exchanging products and services for other products and services rather than for

Correct AnswerverifiedShow Answer

Step 1 of the price-setting process identifies pricing objectives and constraints. Describe the reasons these objectives may change and give examples of objectives a firm may set.

Correct AnswerverifiedPricing objectives involve specifying th...View AnswerShow Answer

Which of these is an example of a price?

Correct AnswerverifiedShow Answer

A technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output is referred to as

Correct AnswerverifiedShow Answer

All of these are examples of pricing constraints exceptwhich?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Total cost refers to

Correct AnswerverifiedShow Answer

Which of the following would be an example of a constraint in Step 1 of the price-setting process?

Correct AnswerverifiedShow Answer

In order to deliver a product that the average consumer can afford, VIZIO

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe break-even point (BEP) is the quanti...View AnswerShow Answer

Companies must know or anticipate what specific prices its present and potential competitors currently charge

Correct AnswerverifiedShow Answer

The horizontal axis of a demand curve graph represents

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The marketplace sets the price for wheat, so farmers who are trying to sell their wheat crops do not need a pricing strategy and do just a little advertising when a crop comes in. The wheat is sold in ________ type of competitive market.

Correct AnswerverifiedShow Answer

Most consumers realize that the quality of diamonds varies, and many believe the higher the price of a diamond, the higher its quality. This is an example of price influencing the perception of overall quality and therefore ________ to consumers.

Correct AnswerverifiedShow Answer

Products such as disposable diapers usually have

Correct AnswerverifiedShow Answer

A target return profit pricing objective implies that a company chooses to

Correct AnswerverifiedShow Answer

Describe the pricing constraints a firm is likely to face.

Correct AnswerverifiedPricing constraints are factors that lim...View AnswerShow Answer

A movement along a demand curve (up or down) for a product occurs ________, assuming that other factors such as consumer tastes, price and availability of substitutes, and consumer incomes remain unchanged.

Correct AnswerverifiedShow Answer

Correct Answer
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Pricing objectives involve specifying th...
View Answer

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The break-even point (BEP) is the quanti...
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Pricing constraints are factors that lim...
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