Question 1

The geographic pricing method that is a modification of uniform delivered pricing,divides the United States (or the total market) into segments,and charges a flat freight rate to all customers in that segment,is called ___________.

Accepted Answer

A)   FOB origin pricing
B)   zone pricing
C)   uniform delivered pricing
D)   basing-point pricingE) A) and B)
F) A) and C)

Question 2

The ability to change prices very quickly,often in real time is known as ___________.

Accepted Answer

A)   dynamic pricing
B)   status quo pricing
C)   satisfactory pricing
D)   pricing based on perceived satisfactionE) C) and D)
F) B) and C)

Question 3

Which of the following represents the final step in setting the right price of a product?

Accepted Answer

A)   Choose a price strategy to help determine a base price.
B)   Fine-tune the base price with pricing tactics.
C)   Establish pricing goals.
D)   Estimate demand,costs,and profits.E) C) and D)
F) A) and D)

Question 4

__________ is the practice of offering a product line with several items at specific price points.

Accepted Answer

A)   Bait pricing
B)   Price bundling
C)   Odd-even pricing
D)   Price liningE) A) and B)
F) A) and C)

Question 5

Which of the following is a price tactic that uses odd-numbered prices to connote bargains and even-numbered prices to imply quality?

Accepted Answer

A)   One-part pricing
B)   Price lining
C)   Psychological pricing
D)   Price skimmingE) A) and C)
F) All of the above

Question 6

Which of the following defines revenue?

Accepted Answer

A)   The price charged to customers multiplied by the number of units sold
B)   Net profit after taxes divided by total assets
C)   Profit minus expenses
D)   Something that is given up in an exchange to acquire a good or serviceE) B) and C)
F) C) and D)

Question 7

Inelastic demand is a situation in which

Accepted Answer

A)   an increase or a decrease in price does not significantly affect the demand for a product.
B)   prices are adjusted over time to maximize a company's revenues.
C)   demand is created for new products by aggressive brand awareness campaigns.
D)   a pricing objective maintains existing prices or meets the competition's prices.E) A) and B)
F) A) and C)

Question 8

_____ is a price tactic that charges freight costs from a given point,regardless of the city from which the goods are shipped.

Accepted Answer

A)   FOB origin pricing
B)   Zone pricing
C)   Uniform delivered pricing
D)   Basing-point pricingE) A) and C)
F) All of the above

Question 9

During off-season,the Rues Hotel offers a 25 percent discount on its rooms to attract guests.The Rues Hotel is demonstrating the ______.

Accepted Answer

A)   power of yield management systems
B)   advantage of markup pricing
C)   relationship between price and quality
D)   use of price as a promotional toolE) B) and C)
F) A) and B)

Question 10

When there are many substitutes available in the market for a particular product,consumers

Accepted Answer

A)   have a hard time switching from one product to another,making demand more elastic.
B)   have a hard time switching from one product to another,making demand more inelastic.
C)   can easily switch from one product to another,making demand more elastic.
D)   can easily switch from one product to another,making demand more inelastic.E) B) and D)
F) A) and B)

Question 11

Price promotion alone always creates a low price image.

Accepted Answer

A) True 
 B)False

Question 12

During the maturity stage of a product life cycle,distribution channels become a significant cost factor.

Accepted Answer

A) True 
 B)False

Question 13

Which statement best describes a similarity between price fixing and predatory pricing?

Accepted Answer

A)   Both are illegal under the Federal Trade Commission Act.
B)   Both are fine-tuning techniques that do not change the general price level.
C)   Both typically discourage and block competition from entering a market.
D)   Both may ignore demand or cost or both.E) B) and D)
F) B) and C)

Question 14

Identify a statement that is true of status quo pricing.

Accepted Answer

A)   It leads to optimal pricing of a product.
B)   It requires serious planning and is difficult to implement.
C)   It focuses on the demand for and the costs of a product.
D)   It can lead to a pricing disaster.E) A) and B)
F) None of the above

Question 15

Which of the following refers to net profit after taxes divided by total assets?

Accepted Answer

A)   Return on investment (ROI) 
B)   Revenue
C)   Profit
D)   PriceE) C) and D)
F) None of the above

Question 16

In which of the following cases is the elasticity of demand expected to be high?

Accepted Answer

A)   Substitutes are available.
B)   A product price is significantly low relative to purchasing power.
C)   Products are not durable.
D)   The product has only one use.E) All of the above
F) C) and D)

Question 17

Consumers determine value of the product on the basis of

Accepted Answer

A)   perceived satisfaction.
B)   the opportunity cost to buy the product.
C)   discounts availed.
D)   what other people buy.E) B) and D)
F) B) and C)

Question 18

Fresnas Designs Inc.is a company known for its quality interior decorations,customized service,and affordable prices.Given the high demand for its service,Fresnas' management could price its products higher,but it prefers to price its products such that it will earn a reasonable revenue.Fresnas bases its pricing policy on _____.

Accepted Answer

A)   sales maximization
B)   earning satisfactory profits
C)   creating retained earnings
D)   status quo pricingE) A) and B)
F) A) and C)

Question 19

In which stage of the product life cycle does price decrease as competition increases and inefficient,high-cost firms are eliminated?

Accepted Answer

A)   Growth stage
B)   Maturity stage
C)   Introductory stage
D)   Decline stageE) A) and B)
F) A) and C)

Question 20

In the absence of other information,people typically assume that prices are higher because the products contain better materials,because they are made more carefully,or,in the case of professional services,because the provider has more expertise.

Accepted Answer

A) True 
 B)False

Exam 19: Pricing Concepts

Correct Answer
verified

The geographic pricing method that is a modification of uniform delivered pricing,divides the United States (or the total market) into segments,and charges a flat freight rate to all customers in that segment,is called ___________.

Correct Answer
verified

Which of the following is a price tactic that uses odd-numbered prices to connote bargains and even-numbered prices to imply quality?

Correct Answer
verified

When there are many substitutes available in the market for a particular product,consumers

Correct Answer
verified

Which statement best describes a similarity between price fixing and predatory pricing?

Correct Answer
verified

__________ is the practice of offering a product line with several items at specific price points.

Correct Answer
verified

Consumers determine value of the product on the basis of

Correct Answer
verified

During off-season,the Rues Hotel offers a 25 percent discount on its rooms to attract guests.The Rues Hotel is demonstrating the ______.

Correct Answer
verified

In which of the following cases is the elasticity of demand expected to be high?

Correct Answer
verified

Which of the following refers to net profit after taxes divided by total assets?

Correct Answer
verified

Price promotion alone always creates a low price image.

Correct Answer
verified

Inelastic demand is a situation in which

Correct Answer
verified

The ability to change prices very quickly,often in real time is known as ___________.

Correct Answer
verified

Identify a statement that is true of status quo pricing.

Correct Answer
verified

In which stage of the product life cycle does price decrease as competition increases and inefficient,high-cost firms are eliminated?

Correct Answer
verified

Which of the following defines revenue?

Correct Answer
verified

In the absence of other information,people typically assume that prices are higher because the products contain better materials,because they are made more carefully,or,in the case of professional services,because the provider has more expertise.

Correct Answer
verified

Which of the following represents the final step in setting the right price of a product?

Correct Answer
verified

During the maturity stage of a product life cycle,distribution channels become a significant cost factor.

Correct Answer
verified

_____ is a price tactic that charges freight costs from a given point,regardless of the city from which the goods are shipped.

Correct Answer
verified

Exam 19: Pricing Concepts

Correct AnswerverifiedShow Answer

The geographic pricing method that is a modification of uniform delivered pricing,divides the United States (or the total market) into segments,and charges a flat freight rate to all customers in that segment,is called ___________.

Correct AnswerverifiedShow Answer

Which of the following is a price tactic that uses odd-numbered prices to connote bargains and even-numbered prices to imply quality?

Correct AnswerverifiedShow Answer

When there are many substitutes available in the market for a particular product,consumers

Correct AnswerverifiedShow Answer

Which statement best describes a similarity between price fixing and predatory pricing?

Correct AnswerverifiedShow Answer

__________ is the practice of offering a product line with several items at specific price points.

Correct AnswerverifiedShow Answer

Consumers determine value of the product on the basis of

Correct AnswerverifiedShow Answer

During off-season,the Rues Hotel offers a 25 percent discount on its rooms to attract guests.The Rues Hotel is demonstrating the ______.

Correct AnswerverifiedShow Answer

In which of the following cases is the elasticity of demand expected to be high?

Correct AnswerverifiedShow Answer

Which of the following refers to net profit after taxes divided by total assets?

Correct AnswerverifiedShow Answer

Price promotion alone always creates a low price image.

Correct AnswerverifiedShow Answer

Inelastic demand is a situation in which

Correct AnswerverifiedShow Answer

The ability to change prices very quickly,often in real time is known as ___________.

Correct AnswerverifiedShow Answer

Identify a statement that is true of status quo pricing.

Correct AnswerverifiedShow Answer

In which stage of the product life cycle does price decrease as competition increases and inefficient,high-cost firms are eliminated?

Correct AnswerverifiedShow Answer

Which of the following defines revenue?

Correct AnswerverifiedShow Answer

In the absence of other information,people typically assume that prices are higher because the products contain better materials,because they are made more carefully,or,in the case of professional services,because the provider has more expertise.

Correct AnswerverifiedShow Answer

Which of the following represents the final step in setting the right price of a product?

Correct AnswerverifiedShow Answer

During the maturity stage of a product life cycle,distribution channels become a significant cost factor.

Correct AnswerverifiedShow Answer

_____ is a price tactic that charges freight costs from a given point,regardless of the city from which the goods are shipped.

Correct AnswerverifiedShow Answer

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