Question 1

Creative marketers engage in value-pricing, which is the practice of simultaneously increasing product and service benefits while

Accepted Answer

A)  increasing costs.
B)  increasing price.
C)  increasing advertising.
D)  decreasing costs.
E)  maintaining or decreasing price.F) A) and B)
G) A) and C)

Question 2

Marketing executives must translate estimates of customer demand into estimates of

Accepted Answer

A)  personnel.
B)  advertising expenditures.
C)  ancillary product support.
D)  revenues the firm expects to receive.
E)  supply.F) C) and E)
G) C) and D)

Question 3

If the CEO of the Clorox Co. were to say, "We want to control 60 percent of the bleach market within the next five years," he would have set a __________ pricing objective.

Accepted Answer

A)  profit
B)  sales
C)  unit volume
D)  market share
E)  social responsibilityF) A) and E)
G) A) and D)

Question 4

Distinguish between elastic demand and inelastic demand.

Accepted Answer

Elastic demand exists when a 1 percent d...

Question 5

Suppose you want to get "plugged in" and buy an all-electric Tesla Model S, the world's leading all-electric, zero-emission car that has a 265-mile range and can be recharged in three hours. The Tesla Model S Performance model has a list price of $87,500. However, you want several options (Performance Plus Package, red multi-coat armor paint, Tech Package, Sound Studio Package, home charging station, performance wheels, and others)  that will cost $17,500. An extended warranty will add an additional $5,000. However, if you put $50,000 down now and finance the balance over the next year, you will receive a dealer rebate of $5,000 off the list price. The dealer will give you a $7,000 trade-in allowance for your 2008 Honda Civic DX four-door sedan. In addition, you will have to pay a state sales tax of $10,000, an auto registration fee of $1,000 to the state, and a $1,000 destination charge to ship and prep the car. But because the Tesla Model S is an alternative energy vehicle, you qualify for a $2,500 state rebate and a $7,500 federal tax credit! Finally, your total finance charge is $7,000. Applying the price equation, what is your final price for the Tesla Model S?

Accepted Answer

A)  $57,000
B)  $68,000
C)  $87,500
D)  $107,000
E)  $151,000F) A) and C)
G) C) and D)

Question 6

You are president of a manufacturer of small electric appliances. You want to reduce your break-even quantity. All things being equal, you can do this by

Accepted Answer

A)  increasing the quantity sold, while keeping price unchanged.
B)  reducing marginal revenue.
C)  reducing unit variable cost.
D)  increasing fixed cost.
E)  increasing total cost.F) A) and D)
G) B) and E)

Question 7

Washburn Guitars markets its guitars to four distinct market segments. The firm's one-of-kind custom instruments are targeted at

Accepted Answer

A)  first-time buyers.
B)  professional musicians.
C)  stars and collectors.
D)  large institutional buyers such as high school and collegiate band programs.
E)  intermediate-skill players who may become professional musicians.F) D) and E)
G) All of the above

Question 8

At one point, people were willing to pay hundreds of dollars on eBay for a Beanie Baby toy that originally cost a fraction of that amount. Today, those same Beanie Babies can be found at garage sales all over the country for less than a dollar apiece. This is most likely due to

Accepted Answer

A)  faulty craftsmanship in later production batches.
B)  a sharp downturn in the economy.
C)  the new, more nostalgic fad of bobblehead dolls.
D)  too many counterfeit Beanie Babies entering the country.
E)  a product becoming a fad and then losing its fad appeal.F) A) and D)
G) B) and E)

Question 9

Pure monopoly is the competitive market situation where

Accepted Answer

A)  many sellers follow market price for identical, commodity products.
B)  one seller sets the price for a unique product.
C)  few sellers are sensitive to one another's prices.
D)  many sellers compete on nonprice factors.
E)  one or a few sellers compete solely on nonprice factors.F) A) and B)
G) A) and C)

Question 10

The sum of the firm's expenses that change with the quantity of the product that is produced and sold is referred to as

Accepted Answer

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

Question 11

Factors that limit the range of prices a firm may set are referred to as

Accepted Answer

A)  pricing restraints.
B)  pricing constraints.
C)  demand factors.
D)  pricing barriers.
E)  pricing restrictions.F) A) and D)
G) A) and C)

Question 12

A break-even chart is a graphic presentation

Accepted Answer

A)  that shows the maximum number of units that will be sold at a certain price.
B)  of a break-even analysis 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) C) and D)
G) A) and E)

Question 13

Unit variable cost refers to variable cost expressed

Accepted Answer

A)  as the sum of all units sold.
B)  on a per unit basis for a product.
C)  as a percentage of total sales.
D)  as a percentage of fixed costs.
E)  as a percentage of total costs.F) B) and C)
G) A) and D)

Question 14

Three different objectives relate to a firm's profit, which is often measured in terms of return on investment. One objective, known as _________, is common in many firms because the targets can be set and performance measured quickly.

Accepted Answer

A)  managing for long-run profits
B)  target return
C)  break-even strategy
D)  maximizing current profit
E)  minimizing riskF) All of the above
G) A) and E)

Question 15

Which of the following statements about the product life cycle as a pricing constraint is most accurate?

Accepted Answer

A)  The newer a product is, the higher the price that can usually be charged.
B)  The later in the product life cycle a product is, the higher the price that can usually be charged.
C)  Once a product is considered nostalgic, the price will continue to rise indefinitely.
D)  Fads will generally have only two price points-high and low-but the values of those price points usually will be within 10 percent of each other.
E)  Prices should not be changed until a product reaches its maturity stage.F) C) and D)
G) A) and E)

Question 16

Which of the following statements regarding a market share pricing objective is most accurate?

Accepted Answer

A)  A market share objective is often difficult for product managers since stockholders are looking for immediate dividends (return of profits) .
B)  Although increased market share is a primary goal of some firms, others see it as a means to other ends, such as increased sales or profits.
C)  Selecting market share as a pricing objective is particularly effective if industry sales are rising.
D)  An advantage of market share as a pricing objective is that it is particularly insensitive to competitors' actions.
E)  Ironically, a market share objective is realized by raising prices in order to increase consumer confidence during the decline stage of a product's life cycle.F) A) and D)
G) C) and D)

Question 17

Pricing constraints refers to

Accepted Answer

A)  barriers that must be overcome in order to set pricing objectives.
B)  competitive pricing advantages one firm has over another.
C)  different pricing strategies for each of the firm's products.
D)  factors that limit the range of prices a firm may set.
E)  barriers to entry a firm faces when launching a new product.F) C) and D)
G) C) and E)

Question 18

Which of the following would be an example of a constraint in Step 1 of the price-setting process?

Accepted Answer

A)  We can rely on our reputation for our other products in the line.
B)  Experts are predicting a surge in global demand.
C)  We need to make allowances for large quantity orders.
D)  We should increase the price during the holiday shopping season.
E)  We're going to face some stiff competition.F) A) and B)
G) None of the above

Question 19

Elastic demand exists when

Accepted Answer

A)  a small percentage decrease in price produces a smaller percentage increase in quantity demanded.
B)  a small percentage decrease in price produces a larger percentage increase in quantity demanded.
C)  an increase in price causes a larger increase in quantity demanded.
D)  the quantity demanded remains the same regardless of level of price.
E)  no change in price produces a small percentage change in quantity demanded.F) B) and C)
G) C) and D)

Question 20

The use of "special fees" and "surcharges" is driven by consumers' zeal for low prices and

Accepted Answer

A)  the ease of making price comparisons on the Internet.
B)  value, the idea of getting more for their money.
C)  the need for extra accessories.
D)  avoiding state sales taxes from Internet purchases.
E)  a dislike of price haggling or negotiating.F) A) and B)
G) A) and C)

Exam 13: Building the Price Foundation

Which of the following statements regarding a market share pricing objective is most accurate?

Correct Answer
verified

Washburn Guitars markets its guitars to four distinct market segments. The firm's one-of-kind custom instruments are targeted at

Correct Answer
verified

Pure monopoly is the competitive market situation where

Correct Answer
verified

Marketing executives must translate estimates of customer demand into estimates of

Correct Answer
verified

If the CEO of the Clorox Co. were to say, "We want to control 60 percent of the bleach market within the next five years," he would have set a __________ pricing objective.

Correct Answer
verified

Which of the following statements about the product life cycle as a pricing constraint is most accurate?

Correct Answer
verified

The use of "special fees" and "surcharges" is driven by consumers' zeal for low prices and

Correct Answer
verified

The sum of the firm's expenses that change with the quantity of the product that is produced and sold is referred to as

Correct Answer
verified

Creative marketers engage in value-pricing, which is the practice of simultaneously increasing product and service benefits while

Correct Answer
verified

Distinguish between elastic demand and inelastic demand.

Correct Answer
verified
Elastic demand exists when a 1 percent d...
View Answer

You are president of a manufacturer of small electric appliances. You want to reduce your break-even quantity. All things being equal, you can do this by

Correct Answer
verified

A break-even chart is a graphic presentation

Correct Answer
verified

Pricing constraints refers to

Correct Answer
verified

At one point, people were willing to pay hundreds of dollars on eBay for a Beanie Baby toy that originally cost a fraction of that amount. Today, those same Beanie Babies can be found at garage sales all over the country for less than a dollar apiece. This is most likely due to

Correct Answer
verified

Which of the following would be an example of a constraint in Step 1 of the price-setting process?

Correct Answer
verified

Three different objectives relate to a firm's profit, which is often measured in terms of return on investment. One objective, known as _________, is common in many firms because the targets can be set and performance measured quickly.

Correct Answer
verified

Factors that limit the range of prices a firm may set are referred to as

Correct Answer
verified

Correct Answer
verified

Unit variable cost refers to variable cost expressed

Correct Answer
verified

Elastic demand exists when

Correct Answer
verified

Exam 13: Building the Price Foundation

Which of the following statements regarding a market share pricing objective is most accurate?

Correct AnswerverifiedShow Answer

Washburn Guitars markets its guitars to four distinct market segments. The firm's one-of-kind custom instruments are targeted at

Correct AnswerverifiedShow Answer

Pure monopoly is the competitive market situation where

Correct AnswerverifiedShow Answer

Marketing executives must translate estimates of customer demand into estimates of

Correct AnswerverifiedShow Answer

If the CEO of the Clorox Co. were to say, "We want to control 60 percent of the bleach market within the next five years," he would have set a __________ pricing objective.

Correct AnswerverifiedShow Answer

Which of the following statements about the product life cycle as a pricing constraint is most accurate?

Correct AnswerverifiedShow Answer

The use of "special fees" and "surcharges" is driven by consumers' zeal for low prices and

Correct AnswerverifiedShow Answer

The sum of the firm's expenses that change with the quantity of the product that is produced and sold is referred to as

Correct AnswerverifiedShow Answer

Creative marketers engage in value-pricing, which is the practice of simultaneously increasing product and service benefits while

Correct AnswerverifiedShow Answer

Distinguish between elastic demand and inelastic demand.

Correct AnswerverifiedElastic demand exists when a 1 percent d...View AnswerShow Answer

You are president of a manufacturer of small electric appliances. You want to reduce your break-even quantity. All things being equal, you can do this by

Correct AnswerverifiedShow Answer

A break-even chart is a graphic presentation

Correct AnswerverifiedShow Answer

Pricing constraints refers to

Correct AnswerverifiedShow Answer

At one point, people were willing to pay hundreds of dollars on eBay for a Beanie Baby toy that originally cost a fraction of that amount. Today, those same Beanie Babies can be found at garage sales all over the country for less than a dollar apiece. This is most likely due to

Correct AnswerverifiedShow Answer

Which of the following would be an example of a constraint in Step 1 of the price-setting process?

Correct AnswerverifiedShow Answer

Three different objectives relate to a firm's profit, which is often measured in terms of return on investment. One objective, known as _________, is common in many firms because the targets can be set and performance measured quickly.

Correct AnswerverifiedShow Answer

Factors that limit the range of prices a firm may set are referred to as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Unit variable cost refers to variable cost expressed

Correct AnswerverifiedShow Answer

Elastic demand exists when

Correct AnswerverifiedShow Answer

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Elastic demand exists when a 1 percent d...
View Answer

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