Question 1

Economists have identified four types of competitive markets: pure monopoly,pure competition,oligopoly,and __________.

Accepted Answer

A)  capitalism
B)  socialism
C)  monopolistic competition
D)  consumer-dominated
E)  government-dominatedF) B) and D)
G) C) and E)

Question 2

Walmart uses which pricing strategy that affects both customers and competitors?

Accepted Answer

A)  penetration pricing
B)  every day fair pricing
C)  every day low pricing
D)  supply-side pricing
E)  value-pricingF) B) and E)
G) A) and C)

Question 3

Three different objectives relate to a firm's profit,which have different implications for pricing strategy.The three profit-oriented objectives include managing for long-run profits,maximizing current profit objectives,and __________.

Accepted Answer

A)  accumulating profits
B)  reinvesting profits
C)  redistributing profits
D)  maximizing gross margin
E)  achieving a target returnF) C) and D)
G) A) and E)

Question 4

According to the price equation,a product's or service's final price equals its list price minus incentives and allowances plus

Accepted Answer

A)  profits.
B)  commissions.
C)  trade-ins.
D)  extra fees.
E)  taxes.F) A) and B)
G) None of the above

Question 5

Which of the following would be an example of a fixed cost for a company that makes carbon monoxide monitoring systems for employees to wear that work in hazardous areas?

Accepted Answer

A)  the lithium batteries that are used in each monitor
B)  the chest harness used to wear the monitor
C)  the insurance for the company's factory
D)  the free training videos that are sent to each new customer
E)  the stainless steel,water-resistant cases in which the monitors are containedF) B) and C)
G) All of the above

Question 6

Setting list or quoted prices would occur during __________ of the price-setting process.

Accepted Answer

A)  Step 1
B)  Step 2
C)  Step 3
D)  Step 4
E)  Step 5F) C) and D)
G) B) and D)

Question 7

Tara is enrolled for spring semester at college.The tuition is $6,000,but she has a scholarship for $1,000 as well as a work-study grant of $1,500.The health fees and student activity fees are $150 for the semester.What is the final price that Tara will pay for the spring semester?

Accepted Answer

A)  $2,500
B)  $2,650
C)  $3,150
D)  $3,650
E)  $6,150F) All of the above
G) A) and D)

Question 8

Price elasticity of demand measures how sensitive consumer demand and the firm's revenues are to changes in the product's price.Explain the difference between a product with elastic demand and a product with inelastic demand.

Accepted Answer

Elastic demand exists when a small perce...

Question 9

Some specialty-toy retailers pursue a __________ pricing objective to generate cash to ward off bankruptcy.

Accepted Answer

A)  market share
B)  survival
C)  sales revenue
D)  single product line
E)  profitF) A) and B)
G) A) and C)

Question 10

Which term describes factors that limit the range of prices a firm may set?

Accepted Answer

A)  price fixings
B)  pricing constraints
C)  price elasticities
D)  pricing demands
E)  pricing marginsF) A) and B)
G) All of the above

Question 11

The maximum quantity of products consumers will buy at given price is shown by

Accepted Answer

A)  a demand curve.
B)  a price constraint.
C)  a break-even point.
D)  a supply curve.
E)  a marginal revenue curve.F) A) and E)
G) C) and D)

Question 12

Price elasticity of demand is determined by a number of factors,such as the availability of substitutes,the necessity of the product or service,and

Accepted Answer

A)  the cash outlay of the purchase relative to a person's disposable income.
B)  the stage of the product or service in its product life cycle.
C)  the degree of carrying costs for the manufacturer or distributor.
D)  the financial resources of the organization itself.
E)  the ability of the organization to meet sudden increases in demand.F) A) and B)
G) A) and C)

Question 13

During the __________ stage of its product life cycle,a firm has great latitude in setting and maintaining a premium price.

Accepted Answer

A)  decline
B)  maturity
C)  growth
D)  accelerated development
E)  introductionF) All of the above
G) A) and B)

Question 14

According to Figure 13-7 above,what is the price for Red Baron frozen cheese pizzas when marginal revenue is $0?

Accepted Answer

A)  $0
B)  $2
C)  $4
D)  $8
E)  $12F) A) and C)
G) B) and C)

Question 15

A pair of $200 designer denim jeans cost so much because

Accepted Answer

A)  the labor to make them comprises the largest percentage of the final price.
B)  the marketer must cover all of its operating costs while earning a profit.
C)  the specialty retailers that sell them account for only 25% of the cost so that the jeans can experience "demand pull."
D)  the contract manufacturer for the jeans receives the least percentage of the final price.
E)  the marketer of the designer denim jeans makes the largest percentage of the final price.F) None of the above
G) B) and C)

Question 16

Rent,executive salaries,and insurance are typical examples of

Accepted Answer

A)  variable costs.
B)  fixed costs.
C)  unit costs.
D)  marginal costs.
E)  total costs.F) B) and D)
G) A) and B)

Question 17

Making special adjustments to the list or quoted price would occur during __________ of the price-setting process.

Accepted Answer

A)  Step 2
B)  Step 3
C)  Step 4
D)  Step 5
E)  Step 6F) A) and C)
G) A) and B)

Question 18

In Figure 13-4 above,column "B" represents which type of competitive market?

Accepted Answer

A)  pure monopoly
B)  oligopoly
C)  monopolistic competition
D)  pure competition
E)  monopolistic oligopolyF) B) and D)
G) C) and D)

Question 19

To reduce the price sensitivity for some of its products,Washburn

Accepted Answer

A)  uses multiple suppliers for its raw materials.
B)  offers three months of free music lessons with the purchase of each guitar.
C)  uses endorsements by internationally known musicians who play Washburn signature guitars.
D)  offers a lifetime,unconditional warranty on all its instruments regardless of the price of its guitars.
E)  sponsors free music programs and special Washburn guitar camps for children.F) D) and E)
G) C) and D)

Question 20

Figure 13-7 above shows that the average revenue at point "C" is

Accepted Answer

A)  $4.
B)  $5.
C)  $6.
D)  $8.
E)  $10.F) None of the above
G) All of the above

Exam 13: Building the Price Foundation

Figure 13-7 above shows that the average revenue at point "C" is

Correct AnswerverifiedShow Answer

Setting list or quoted prices would occur during __________ of the price-setting process.

Correct AnswerverifiedShow Answer

The maximum quantity of products consumers will buy at given price is shown by

Correct AnswerverifiedShow Answer

Which term describes factors that limit the range of prices a firm may set?

Correct AnswerverifiedShow Answer

Which of the following would be an example of a fixed cost for a company that makes carbon monoxide monitoring systems for employees to wear that work in hazardous areas?

Correct AnswerverifiedShow Answer

Three different objectives relate to a firm's profit,which have different implications for pricing strategy.The three profit-oriented objectives include managing for long-run profits,maximizing current profit objectives,and __________.

Correct AnswerverifiedShow Answer

Walmart uses which pricing strategy that affects both customers and competitors?

Correct AnswerverifiedShow Answer

A pair of $200 designer denim jeans cost so much because

Correct AnswerverifiedShow Answer

To reduce the price sensitivity for some of its products,Washburn

Correct AnswerverifiedShow Answer

Price elasticity of demand is determined by a number of factors,such as the availability of substitutes,the necessity of the product or service,and

Correct AnswerverifiedShow Answer

Economists have identified four types of competitive markets: pure monopoly,pure competition,oligopoly,and __________.

Correct AnswerverifiedShow Answer

During the __________ stage of its product life cycle,a firm has great latitude in setting and maintaining a premium price.

Correct AnswerverifiedShow Answer

According to Figure 13-7 above,what is the price for Red Baron frozen cheese pizzas when marginal revenue is $0?

Correct AnswerverifiedShow Answer

Price elasticity of demand measures how sensitive consumer demand and the firm's revenues are to changes in the product's price.Explain the difference between a product with elastic demand and a product with inelastic demand.

Correct AnswerverifiedElastic demand exists when a small perce...View AnswerShow Answer

According to the price equation,a product's or service's final price equals its list price minus incentives and allowances plus

Correct AnswerverifiedShow Answer

Some specialty-toy retailers pursue a __________ pricing objective to generate cash to ward off bankruptcy.

Correct AnswerverifiedShow Answer

Making special adjustments to the list or quoted price would occur during __________ of the price-setting process.

Correct AnswerverifiedShow Answer

Rent,executive salaries,and insurance are typical examples of

Correct AnswerverifiedShow Answer

Tara is enrolled for spring semester at college.The tuition is $6,000,but she has a scholarship for $1,000 as well as a work-study grant of $1,500.The health fees and student activity fees are $150 for the semester.What is the final price that Tara will pay for the spring semester?

Correct AnswerverifiedShow Answer

In Figure 13-4 above,column "B" represents which type of competitive market?

Correct AnswerverifiedShow Answer

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Elastic demand exists when a small perce...
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