Question 1

Figure 14-1 above represents the six steps in setting price.Which letter represents the step where a firm would consider discounts,allowances,and geographical adjustments to arrive at the final price?

Accepted Answer

A)  "B"
B)  "C"
C)  "D"
D)  "E"
E)  "F"

Question 2

Your local instant photocopying service charges 10 cents a copy up to 25 copies,9 cents a copy for 26 to 99 copies,and 8 cents a copy for 100 copies or more.What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

Accepted Answer

A)  experience curve pricing
B)  loss-leader pricing
C)  a quantity discount
D)  a promotional discount
E)  everyday low pricing

Question 3

What is the difference between noncumulative and cumulative quantity discounts?

Accepted Answer

Noncumulative quantity discounts are bas...

Question 4

All of the following statements about standard markup pricing are true EXCEPT:

Accepted Answer

A)  high-volume products usually have smaller markups than do low-volume products.
B)  The percentage markup depends on the type of retail store and the product involved.
C)  markups must cover all expenses of the store,pay for overhead costs,and contribute something to profits.
D)  summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price.
E)  supermarket managers have such a large number of products that estimating the demand for each product as a means of setting price is impossible.

Question 5

According to the Geographical Pricing Map B above,if the plant in Denver ships its products to all the identified cities in the U.S.at different prices based on distance as indicated by the color-coded regions,it is most likely using which type of pricing?

Accepted Answer

A)  FOB zone pricing
B)  multiple-zone pricing
C)  single-zone pricing
D)  FOB destination pricing
E)  basing-point pricing

Question 6

A pricing strategy where the buyer is allowed to deduct freight expenses from the list price of the goods so the seller pays the transportation costs is referred to as

Accepted Answer

A)  FOB factory pricing.
B)  FOB absorption pricing.
C)  FOB origin pricing.
D)  basing-point pricing.
E)  FOB with freight-allowed pricing.

Question 7

With profit-oriented approaches to pricing,a price setter may choose to balance both __________ and __________ to set price.

Accepted Answer

A)  revenue;profit
B)  tangible goods;services
C)  cost;revenue
D)  demand;supply
E)  cost;demand

Question 8

The movement from point B to point C in Figure 14-3 above shows

Accepted Answer

A)  an increased demand for the product at a lower price.
B)  derived demand.
C)  that buyers see the product as a bargain and buy more.
D)  that buyers become dubious about the quality and prestige and buy less.
E)  a downturn in the economy.

Question 9

Suppose a firm selects its plant in St.Louis as the location from where it will ship its products to all of the identified cities shown in Geographical Pricing Map C above.The MSRP of the product is $100 but the firm adds a freight surcharge to cover transportation/freight.This surcharge will vary according to the distance between the origin of the shipment-in this case St.Louis-and the destination or customer's location.What is the most likely pricing method this firm is using?

Accepted Answer

A)  FOB origin pricing
B)  multiple-zone pricing
C)  single-zone pricing
D)  basing-point pricing
E)  FOB destination pricing

Question 10

As the brand manager for Red Bull,what would you conclude from the information provided in the UMD14: Price Premium Marketing Dashboard above?

Accepted Answer

A)  Red Bull has a price premium relative to Monster.
B)  Rockstar has a price premium relative to Monster.
C)  Red Bull engaged in price discounting relative to both Monster and Rockstar from 2009 to 2010.
D)  Rockstar sold more product than Monster in 2010.
E)  In terms of dollar market share,Red Bull has a lower share than the "Other Brands" category.

Question 11

In one of its least favorite actions,Amazon.com was caught fiddling with its price tags.Avid DVD buyers,buying in quantity for resale,found that the online retailer was offering different customers different prices for the same DVD,and complained vociferously.Amazon was caught red-handed.Company officials admitted that the company was trying to see how much it could charge for an item before buyers balked.No matter what the reasoning behind it,Amazon.com was using

Accepted Answer

A)  horizontal price-fixing.
B)  price discrimination.
C)  resale price maintenance.
D)  predatory pricing.
E)  bait and switch pricing.

Question 12

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 pricing

Question 13

Consider Figure 14-9 above."B" represents which of the following legislative acts?

Accepted Answer

A)  The Robinson-Patman Act
B)  The Clayton Act
C)  The Sherman Act
D)  The Federal Trade Commission Act
E)  The Consumer Goods Pricing Act

Question 14

Predatory pricing refers to

Accepted Answer

A)  the practice of charging a very low price for a product with the intent of driving competitors out of business.
B)  a conspiracy among firms to set prices for a product.
C)  using price differentials when charging different prices on the basis of race,religion,or ethnic affiliation.
D)  using price differentials when charging the original price for refurbished goods that have been damaged or used and returned 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.

Question 15

A reduction from the list price that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller is called

Accepted Answer

A)  the pretax price.
B)  the list price.
C)  the manufacturer's suggested retail price (MSRP) .
D)  a discount.
E)  a trade-in allowance.

Question 16

A skimming pricing policy is likely to be most effective when: (1) enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable; (2) the high initial price will not attract competitors; (3) lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost;and (4) __________.

Accepted Answer

A)  enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable
B)  consumers tend to be price sensitive
C)  customers interpret the high price as signifying high quality
D)  lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost
E)  consumers perceive your product to be similar to other products on the market

Question 17

Five pricing practices are closely scrutinized because of potential unethical or illegal actions.They include: (1) predatory pricing; (2) price discrimination; (3) deceptive pricing; (4) geographical pricing;and (5) __________.

Accepted Answer

A)  price discounting
B)  lateral price fixing
C)  price fixing
D)  delayed payment penalties
E)  price discrimination

Question 18

Bundle pricing is considered to be a __________ pricing practice.

Accepted Answer

A)  demand-oriented
B)  cost-oriented
C)  profit-oriented
D)  competition-oriented
E)  product line-oriented

Question 19

The Consumer Goods Pricing Act,the Sherman Act,the Federal Trade Commission Act,and the Robinson-Patman Act all address different aspects of deceptive pricing.Select one example for each act and explain which aspects of the practice would be considered illegal.

Accepted Answer

The Consumer Goods Pricing Act considers...

Question 20

Consider the dynamic pricing chart above,which shows the results of a National Bureau of Economic Research study of 750,000 car purchases.The data indicate that some groups of car buyers,on average,paid roughly $105,$423,and $483 respectively for a new car in the $21,000 range than the typical purchaser.Who are the car buyers in "B?"

Accepted Answer

A)  women
B)  the elderly
C)  Hispanics
D)  African Americans
E)  Asian Americans

Exam 14: Arriving at the Final Price

The Consumer Goods Pricing Act,the Sherman Act,the Federal Trade Commission Act,and the Robinson-Patman Act all address different aspects of deceptive pricing.Select one example for each act and explain which aspects of the practice would be considered illegal.

Correct Answer
verified
The Consumer Goods Pricing Act considers...
View Answer

With profit-oriented approaches to pricing,a price setter may choose to balance both and to set price.

Correct Answer
verified

As the brand manager for Red Bull,what would you conclude from the information provided in the UMD14: Price Premium Marketing Dashboard above?

Correct Answer
verified

Figure 14-1 above represents the six steps in setting price.Which letter represents the step where a firm would consider discounts,allowances,and geographical adjustments to arrive at the final price?

Correct Answer
verified

A pricing strategy where the buyer is allowed to deduct freight expenses from the list price of the goods so the seller pays the transportation costs is referred to as

Correct Answer
verified

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

Correct Answer
verified

According to the Geographical Pricing Map B above,if the plant in Denver ships its products to all the identified cities in the U.S.at different prices based on distance as indicated by the color-coded regions,it is most likely using which type of pricing?

Correct Answer
verified

All of the following statements about standard markup pricing are true EXCEPT:

Correct Answer
verified

Bundle pricing is considered to be a __________ pricing practice.

Correct Answer
verified

A reduction from the list price that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller is called

Correct Answer
verified

Predatory pricing refers to

Correct Answer
verified

Consider Figure 14-9 above."B" represents which of the following legislative acts?

Correct Answer
verified

Correct Answer
verified

Your local instant photocopying service charges 10 cents a copy up to 25 copies,9 cents a copy for 26 to 99 copies,and 8 cents a copy for 100 copies or more.What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

Correct Answer
verified

The movement from point B to point C in Figure 14-3 above shows

Correct Answer
verified

Correct Answer
verified

Five pricing practices are closely scrutinized because of potential unethical or illegal actions.They include: (1) predatory pricing; (2) price discrimination; (3) deceptive pricing; (4) geographical pricing;and (5) __________.

Correct Answer
verified

Correct Answer
verified

What is the difference between noncumulative and cumulative quantity discounts?

Correct Answer
verified
Noncumulative quantity discounts are bas...
View Answer

Exam 14: Arriving at the Final Price

The Consumer Goods Pricing Act,the Sherman Act,the Federal Trade Commission Act,and the Robinson-Patman Act all address different aspects of deceptive pricing.Select one example for each act and explain which aspects of the practice would be considered illegal.

Correct AnswerverifiedThe Consumer Goods Pricing Act considers...View AnswerShow Answer

With profit-oriented approaches to pricing,a price setter may choose to balance both __________ and __________ to set price.

Correct AnswerverifiedShow Answer

As the brand manager for Red Bull,what would you conclude from the information provided in the UMD14: Price Premium Marketing Dashboard above?

Correct AnswerverifiedShow Answer

Figure 14-1 above represents the six steps in setting price.Which letter represents the step where a firm would consider discounts,allowances,and geographical adjustments to arrive at the final price?

Correct AnswerverifiedShow Answer

A pricing strategy where the buyer is allowed to deduct freight expenses from the list price of the goods so the seller pays the transportation costs is referred to as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

According to the Geographical Pricing Map B above,if the plant in Denver ships its products to all the identified cities in the U.S.at different prices based on distance as indicated by the color-coded regions,it is most likely using which type of pricing?

Correct AnswerverifiedShow Answer

All of the following statements about standard markup pricing are true EXCEPT:

Correct AnswerverifiedShow Answer

Bundle pricing is considered to be a __________ pricing practice.

Correct AnswerverifiedShow Answer

A reduction from the list price that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller is called

Correct AnswerverifiedShow Answer

Predatory pricing refers to

Correct AnswerverifiedShow Answer

Consider Figure 14-9 above."B" represents which of the following legislative acts?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Your local instant photocopying service charges 10 cents a copy up to 25 copies,9 cents a copy for 26 to 99 copies,and 8 cents a copy for 100 copies or more.What kind of adjustment to its list or quoted price of 10 cents per copy is the photocopying service using?

Correct AnswerverifiedShow Answer

The movement from point B to point C in Figure 14-3 above shows

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Five pricing practices are closely scrutinized because of potential unethical or illegal actions.They include: (1) predatory pricing; (2) price discrimination; (3) deceptive pricing; (4) geographical pricing;and (5) __________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What is the difference between noncumulative and cumulative quantity discounts?

Correct AnswerverifiedNoncumulative quantity discounts are bas...View AnswerShow Answer

Correct Answer
verified
The Consumer Goods Pricing Act considers...
View Answer

With profit-oriented approaches to pricing,a price setter may choose to balance both and to set price.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

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
verified
Noncumulative quantity discounts are bas...
View Answer