Question 1

Ideally, pricing decisions have little relation to a firm's marketing objectives.

Accepted Answer

A) True 
 B)False

Question 2

Brand uniqueness is not important in nonprice competition.

Accepted Answer

A) True 
 B)False

Question 3

To determine the breakeven point in units, divide the fixed costs by

Accepted Answer

A)  total costs.
B)  variable costs time price.
C)  price minus variable costs.
D)  price per unit.
E)  total revenue minus fixed costs.

Question 4

Reductions for transportation and other costs related to the physical distance between buyer and seller are known as

Accepted Answer

A)  base-point pricing.
B)  freight absorption pricing.
C)  price zoning.
D)  location pricing.
E)  geographic pricing.

Question 5

Elastic demand is usually a result of the lack of substitute products.

Accepted Answer

A) True 
 B)False

Question 6

Scenario 12.1
Use the following to answer the questions.
Concession Supply sells hotdogs, buns, and nacho ingredients to several major league ballparks across the country. Currently, Concession Supply has the following pricing information for one case of hotdogs sold at Wrigley Field: Total fixed costs = $1,200, Selling price = $16, and Variable costs = $6.
-Refer to Scenario 12.1. If Concession Supply wanted to make a profit of $800 on each case, it would need to sell ____ cases.

Accepted Answer

A)  150
B)  300
C)  100
D)  75
E)  200

Question 7

A measure of sensitivity of demand in relation to changes in price is

Accepted Answer

A)  a demand curve.
B)  a prestige graph.
C)  marginal analysis.
D)  price elasticity of demand.
E)  quantity elasticity.

Question 8

A graph of the quantity of products marketers expect to sell at various prices if other factors remain constant is a

Accepted Answer

A)  price graph.
B)  supply curve.
C)  price/quantity graph.
D)  marginal revenue curve.
E)  demand curve.

Question 9

The tuition and fees each student paid for this semester of college are both terms for

Accepted Answer

A)  expenses.
B)  charges.
C)  bills.
D)  price.
E)  exchange valuations.

Question 10

The fact that a gas station in Texas pays less for fuel than a gas station in Maine from a producer in Louisiana suggests that refineries are using which of the following pricing methods?

Accepted Answer

A)  Price differentiation
B)  Base-point pricing
C)  Freight absorption pricing
D)  Transfer pricing
E)  Zone pricing

Question 11

Markum Industries determines that for its air compressors the following results are achieved at a price of $250: total costs = $250,000; variable costs per unit = $100; fixed costs = $175,000. Given these figures, Markum would break even at ____ units.

Accepted Answer

A)  1,167
B)  1,000
C)  1,750
D)  2,500
E)  700

Question 12

Which of the following is not a discount provided to business customers?

Accepted Answer

A)  Trade
B)  Cumulative
C)  Cash
D)  Seasonal
E)  Differentiated

Question 13

If Carnival Cruise Lines increased the price of its seven-day cruise package by 10 percent and, as a result, experienced a 20 percent decline in customer bookings, Carnival's demand would be

Accepted Answer

A)  steady.
B)  inelastic.
C)  elastic.
D)  prestige.
E)  marginal.

Question 14

If Seagram's marketers found that the firm's Crown Royal bourbon was a prestige product and raised its price, which of the following would most likely happen?

Accepted Answer

A)  The quantity demanded would immediately fall.
B)  The quantity demanded would always increase.
C)  Above some price level, the quantity demanded would begin to decrease.
D)  The demand curve for the product would always shift to the right.
E)  The demand curve for the product would always shift to the left.

Question 15

Price should be defined in terms of money only.

Accepted Answer

A) True 
 B)False

Question 16

Nonprice competition can be used to establish brand loyalty.

Accepted Answer

A) True 
 B)False

Question 17

What equation shows organizations the relationship between price and profit?

Accepted Answer

A)  Total Variable Costs + Total Fixed Costs = Sales - Profit
B)  Price = Profit per Item ´ Number of Units Sold
C)  (Price ´ Quantity Sold)  - Total Costs = Profits
D)  (Price - Profits)  ´ Total Costs = Sales
E)  Total Costs = (Price ´ Quantity Sold)  - Profits

Question 18

What does the demand curve for a prestige product look like?

Accepted Answer

A)  It is a straight line where the quantity sold continues to increase as the price of each product increases.
B)  It is a curve where the highest and the lowest prices yield the greatest quantity sold and mid-range prices produce the fewest sales.
C)  It forms a curve where the greatest quantity sold comes at a medium price and the quantities fall as the price increases or decreases.
D)  It forms a straight vertical line because of the prestige of the product, and quantity sold will remain stable regardless of the price.
E)  It slopes from left to right at a very mild slope; that is, as quantity increases, price decreases slowly.

Question 19

Suppose Tommy Hilfiger is introducing a new line of men's ties. The designer believes that the target market for these ties comprises men who are very status-conscious. In keeping with this assessment, department stores selling the ties should

Accepted Answer

A)  charge a price based on their cost.
B)  charge prices consistent with their existing ties.
C)  discount the ties.
D)  negotiate the price with individual tie shoppers.
E)  use price symbolically.

Question 20

____ consumers are concerned about both the price and the quality aspects of a product.

Accepted Answer

A)  Price-conscious
B)  Prestige-sensitive
C)  Value-conscious
D)  Price-conscious and prestige-sensitive
E)  Quality-conscious

Exam 12: Pricing Concepts

Markum Industries determines that for its air compressors the following results are achieved at a price of $250: total costs = $250,000; variable costs per unit = $100; fixed costs = $175,000. Given these figures, Markum would break even at ____ units.

Correct Answer
verified

What equation shows organizations the relationship between price and profit?

Correct Answer
verified

The tuition and fees each student paid for this semester of college are both terms for

Correct Answer
verified

What does the demand curve for a prestige product look like?

Correct Answer
verified

Ideally, pricing decisions have little relation to a firm's marketing objectives.

Correct Answer
verified

To determine the breakeven point in units, divide the fixed costs by

Correct Answer
verified

Which of the following is not a discount provided to business customers?

Correct Answer
verified

If Seagram's marketers found that the firm's Crown Royal bourbon was a prestige product and raised its price, which of the following would most likely happen?

Correct Answer
verified

Reductions for transportation and other costs related to the physical distance between buyer and seller are known as

Correct Answer
verified

Suppose Tommy Hilfiger is introducing a new line of men's ties. The designer believes that the target market for these ties comprises men who are very status-conscious. In keeping with this assessment, department stores selling the ties should

Correct Answer
verified

A graph of the quantity of products marketers expect to sell at various prices if other factors remain constant is a

Correct Answer
verified

If Carnival Cruise Lines increased the price of its seven-day cruise package by 10 percent and, as a result, experienced a 20 percent decline in customer bookings, Carnival's demand would be

Correct Answer
verified

Elastic demand is usually a result of the lack of substitute products.

Correct Answer
verified

A measure of sensitivity of demand in relation to changes in price is

Correct Answer
verified

Nonprice competition can be used to establish brand loyalty.

Correct Answer
verified

Price should be defined in terms of money only.

Correct Answer
verified

Brand uniqueness is not important in nonprice competition.

Correct Answer
verified

The fact that a gas station in Texas pays less for fuel than a gas station in Maine from a producer in Louisiana suggests that refineries are using which of the following pricing methods?

Correct Answer
verified

____ consumers are concerned about both the price and the quality aspects of a product.

Correct Answer
verified

Correct Answer
verified

Exam 12: Pricing Concepts

Markum Industries determines that for its air compressors the following results are achieved at a price of $250: total costs = $250,000; variable costs per unit = $100; fixed costs = $175,000. Given these figures, Markum would break even at ____ units.

Correct AnswerverifiedShow Answer

What equation shows organizations the relationship between price and profit?

Correct AnswerverifiedShow Answer

The tuition and fees each student paid for this semester of college are both terms for

Correct AnswerverifiedShow Answer

What does the demand curve for a prestige product look like?

Correct AnswerverifiedShow Answer

Ideally, pricing decisions have little relation to a firm's marketing objectives.

Correct AnswerverifiedShow Answer

To determine the breakeven point in units, divide the fixed costs by

Correct AnswerverifiedShow Answer

Which of the following is not a discount provided to business customers?

Correct AnswerverifiedShow Answer

If Seagram's marketers found that the firm's Crown Royal bourbon was a prestige product and raised its price, which of the following would most likely happen?

Correct AnswerverifiedShow Answer

Reductions for transportation and other costs related to the physical distance between buyer and seller are known as

Correct AnswerverifiedShow Answer

Suppose Tommy Hilfiger is introducing a new line of men's ties. The designer believes that the target market for these ties comprises men who are very status-conscious. In keeping with this assessment, department stores selling the ties should

Correct AnswerverifiedShow Answer

A graph of the quantity of products marketers expect to sell at various prices if other factors remain constant is a

Correct AnswerverifiedShow Answer

If Carnival Cruise Lines increased the price of its seven-day cruise package by 10 percent and, as a result, experienced a 20 percent decline in customer bookings, Carnival's demand would be

Correct AnswerverifiedShow Answer

Elastic demand is usually a result of the lack of substitute products.

Correct AnswerverifiedShow Answer

A measure of sensitivity of demand in relation to changes in price is

Correct AnswerverifiedShow Answer

Nonprice competition can be used to establish brand loyalty.

Correct AnswerverifiedShow Answer

Price should be defined in terms of money only.

Correct AnswerverifiedShow Answer

Brand uniqueness is not important in nonprice competition.

Correct AnswerverifiedShow Answer

The fact that a gas station in Texas pays less for fuel than a gas station in Maine from a producer in Louisiana suggests that refineries are using which of the following pricing methods?

Correct AnswerverifiedShow Answer

____ consumers are concerned about both the price and the quality aspects of a product.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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