Question 1

Target profit pricing refers to

Accepted Answer

A)  adjusting the price of a product so it is in line with that of its largest competitor.
B)  setting an annual target of a specific dollar volume of profit.
C)  setting the price of a line of products at a number of different price points.
D)  adding a fixed percentage to the cost of all items in a specific product class.
E)  setting prices to achieve a profit that is a specified percentage of production costs.F) A) and B)
G) A) and C)

Question 2

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 demandedF) A) and E)
G) B) and E)

Question 3

Vizio's HDTVs are sold through all of the following types of retailers EXCEPT:

Accepted Answer

A)  Amazon.com.
B)  mass merchandisers, such as Target.
C)  its own company stores.
D)  wholesale club stores such as Sam's Club.
E)  electronics stores such as Best Buy.F) A) and C)
G) B) and C)

Question 4

The money or other considerations (including other products and services)  exchanged for the ownership or use of a product or service is referred to as __________.

Accepted Answer

A)  a fee
B)  value
C)  renumeration
D)  price
E)  an exchange rateF) B) and C)
G) D) and E)

Question 5

To encourage buyers to stock inventory earlier than their normal demand would require, manufacturers often use

Accepted Answer

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

Question 6

Cost-plus pricing refers to

Accepted Answer

A)  summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at the price.
B)  setting the price of a line of products at a number of different price points.
C)  adding a fixed percentage to the cost of all items in a specific product class.
D)  setting prices to achieve a profit that is a specified percentage of the sales volume.
E)  increasing the price slightly to protect against undue profit losses from unforeseen environmental forces.F) B) and D)
G) A) and E)

Question 7

What do 60 percent of prospective buyers dread about looking for a new car?

Accepted Answer

A)  selecting the preferred brand
B)  negotiating the price
C)  taking a test drive
D)  experiencing postpurchase dissonance
E)  searching for cars on the InternetF) A) and B)
G) A) and C)

Question 8

A construction company was offered a 3 percent reduction in price off all invoices from a lumber yard for paying them within 10 days of issue. The lumber yard was offering a

Accepted Answer

A)  trade discount.
B)  cash discount.
C)  promotional allowance.
D)  rebate.
E)  flexible priceF) B) and C)
G) A) and E) B

Question 9

Skimming pricing is a strategy that introduces a new or innovative product by

Accepted Answer

A)  following a price elastic strategy.
B)  creating multiple price points.
C)  setting a high initial price.
D)  setting a low initial price.
E)  setting the price at the average of competitors' prices.F) A) and E)
G) C) and D)

Question 10

Seasonal discounts are used by manufacturers to

Accepted Answer

A)  get rid of dated merchandise.
B)  prevent retailers from purchasing competitors' products.
C)  prolong the peak seasonal selling season.
D)  establish an immediate feeling of goodwill between the buyer and seller that hopefully will continue when prices return to normal.
E)  entice dealers to purchase seasonal merchandise earlier in the selling season.F) A) and E)
G) B) and C)

Question 11

Which of the four approaches does Carmex use to set prices for its products?

Accepted Answer

Carmex uses each of the four perspective...

Question 12

Recently, much of the western U.S. experienced a drought condition and water usage was restricted in Denver. Yet, even though most people used less water, the price of water did not drop. When the drought was declared over, the water company raised water prices. However, the residents of Denver did not use less water. Here, water is

Accepted Answer

A)  price elastic.
B)  price sensitive.
C)  price inelastic.
D)  price insensitive.
E)  unitary elastic.F) A) and D)
G) B) and D) C

Question 13

A hardware store advertises a 3/8" Black and Decker Power Drill for $29.95. You enter the store intending to purchase the drill. The salesperson informs you that they are all sold out. She tells you that the sale drills were factory seconds and that if you are going to be doing any kind of serious woodworking, you should buy the Model 3309, which sells for $49.99. This scenario has elements of which type of illegal pricing practice?

Accepted Answer

A)  predatory pricing
B)  price discrimination
C)  price fixing
D)  bait and switch
E)  conditional bargainsF) A) and B)
G) B) and C)

Question 14

Yield management pricing is most consistent with services attempting to deal with

Accepted Answer

A)  perceived risk.
B)  capacity management.
C)  cognitive dissonance.
D)  inelasticity of demand.
E)  new product strategy development.F) A) and C)
G) B) and E)

Question 15

Netflix used to charge $14.99 per month for its movie rental service. However, when Blockbuster introduced the same service at $13.99, Netflix then dropped its price to $13.99. Netflix most likely made this price reduction in an attempt to

Accepted Answer

A)  decrease revenue but increase profit.
B)  increase profit by decreasing revenue.
C)  maintain market share.
D)  decrease market share.
E)  increase efficiency.F) C) and E)
G) C) and D)

Question 16

A break-even chart refers to a graphic presentation

Accepted Answer

A)  that shows the maximum number of units that will be sold at a certain price.
B)  that shows when total revenue and total cost intersect to identify profit or loss for a given quantity sold.
C)  that relates variable costs in terms of product or service substitutes in order to determine which items or services would least affect total revenues.
D)  that relates profits and revenues versus total costs in order to determine the time frame in which a company could achieve profitability.
E)  is a form of scatter graph used to identify specific activities or items that are creating the greatest return on investment.F) A) and E)
G) C) and D)

Question 17

Unit volume as a pricing objective refers to

Accepted Answer

A)  the quantity of products to be produced or sold.
B)  the ratio of price per unit to unit variable cost.
C)  the ratio of production costs to the minimum sales price that would still generate profit.
D)  the total quantity of product sold by a firm relative to the total quantity of product sold by all firms in the industry.
E)  variable cost expressed on a per unit basis for a product.F) None of the above
G) C) and D) A

Question 18

Which of the following is a cost-oriented pricing method?

Accepted Answer

A)  loss leader pricing
B)  standard markup pricing
C)  at-, above-, or below-market pricing
D)  price lining
E)  penetration pricingF) A) and D)
G) C) and D)

Question 19

The manager of a small gasoline station observes that while gasoline sales have been steady, the service side of the business has fallen off, and mechanics are often idle. He decides to offer a promotion, a $20 off coupon for an oil change mailed to 800 households within a two-mile radius. The cost of printing and mailing is $1,000. The normal cost of an oil change is $40. Materials and labor per oil change costs $15. If 200 customers use the coupon, what will be the total profit of the promotion based on the profit equation?

Accepted Answer

A)  ($4,000) 
B)  ($1,000) 
C)  $0
D)  $1,000
E)  $4,000F) A) and B)
G) C) and D)

Question 20

A new car dealer can reduce the list price of a new Ford F-150 pickup truck by offering you a __________ of $1,000 for your 1998 Nissan Altima.

Accepted Answer

A)  cash discount
B)  functional discount
C)  seasonal discount
D)  trade-in allowance
E)  promotional allowanceF) B) and C)
G) A) and E)

Exam 11: Pricing Products and Services

Target profit pricing refers to

Correct Answer
verified

The horizontal axis of a demand curve graph represents __________.

Correct Answer
verified

Vizio's HDTVs are sold through all of the following types of retailers EXCEPT:

Correct Answer
verified

The money or other considerations (including other products and services) exchanged for the ownership or use of a product or service is referred to as __________.

Correct Answer
verified

To encourage buyers to stock inventory earlier than their normal demand would require, manufacturers often use

Correct Answer
verified

Cost-plus pricing refers to

Correct Answer
verified

What do 60 percent of prospective buyers dread about looking for a new car?

Correct Answer
verified

A construction company was offered a 3 percent reduction in price off all invoices from a lumber yard for paying them within 10 days of issue. The lumber yard was offering a

Correct Answer
verified
B

Skimming pricing is a strategy that introduces a new or innovative product by

Correct Answer
verified

Seasonal discounts are used by manufacturers to

Correct Answer
verified

Which of the four approaches does Carmex use to set prices for its products?

Correct Answer
verified
Carmex uses each of the four perspective...
View Answer

Correct Answer
verified
C

Correct Answer
verified

Yield management pricing is most consistent with services attempting to deal with

Correct Answer
verified

Netflix used to charge $14.99 per month for its movie rental service. However, when Blockbuster introduced the same service at $13.99, Netflix then dropped its price to $13.99. Netflix most likely made this price reduction in an attempt to

Correct Answer
verified

A break-even chart refers to a graphic presentation

Correct Answer
verified

Unit volume as a pricing objective refers to

Correct Answer
verified
A

Which of the following is a cost-oriented pricing method?

Correct Answer
verified

Correct Answer
verified

A new car dealer can reduce the list price of a new Ford F-150 pickup truck by offering you a __________ of $1,000 for your 1998 Nissan Altima.

Correct Answer
verified

Exam 11: Pricing Products and Services

Target profit pricing refers to

Correct AnswerverifiedShow Answer

The horizontal axis of a demand curve graph represents __________.

Correct AnswerverifiedShow Answer

Vizio's HDTVs are sold through all of the following types of retailers EXCEPT:

Correct AnswerverifiedShow Answer

The money or other considerations (including other products and services) exchanged for the ownership or use of a product or service is referred to as __________.

Correct AnswerverifiedShow Answer

To encourage buyers to stock inventory earlier than their normal demand would require, manufacturers often use

Correct AnswerverifiedShow Answer

Cost-plus pricing refers to

Correct AnswerverifiedShow Answer

What do 60 percent of prospective buyers dread about looking for a new car?

Correct AnswerverifiedShow Answer

A construction company was offered a 3 percent reduction in price off all invoices from a lumber yard for paying them within 10 days of issue. The lumber yard was offering a

Correct AnswerverifiedB

Skimming pricing is a strategy that introduces a new or innovative product by

Correct AnswerverifiedShow Answer

Seasonal discounts are used by manufacturers to

Correct AnswerverifiedShow Answer

Which of the four approaches does Carmex use to set prices for its products?

Correct AnswerverifiedCarmex uses each of the four perspective...View AnswerShow Answer

Correct AnswerverifiedC

Correct AnswerverifiedShow Answer

Yield management pricing is most consistent with services attempting to deal with

Correct AnswerverifiedShow Answer

Netflix used to charge $14.99 per month for its movie rental service. However, when Blockbuster introduced the same service at $13.99, Netflix then dropped its price to $13.99. Netflix most likely made this price reduction in an attempt to

Correct AnswerverifiedShow Answer

A break-even chart refers to a graphic presentation

Correct AnswerverifiedShow Answer

Unit volume as a pricing objective refers to

Correct AnswerverifiedA

Which of the following is a cost-oriented pricing method?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A new car dealer can reduce the list price of a new Ford F-150 pickup truck by offering you a __________ of $1,000 for your 1998 Nissan Altima.

Correct AnswerverifiedShow Answer

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B

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Carmex uses each of the four perspective...
View Answer

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C

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A

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