Question 1

The less ________ the demand, the ________ it pays for the seller to raise the price.

Accepted Answer

A)   determined; less
B)   elastic; more
C)   elastic; less
D)   constant; more
E)   fixed; moreF) B) and D)
G) A) and B)

Question 2

Which of the following is NOT a type of pricing objective?

Accepted Answer

A)   elasticity
B)   volume
C)   profitability
D)   meeting competition
E)   prestigeF) All of the above
G) None of the above

Question 3

As production workers become better organized and more familiar with equipment, the average cost per unit decreases. This is called the ________.

Accepted Answer

A)   demand curve
B)   experience curve
C)   skimming cost
D)   penetration cost
E)   marginal utilityF) B) and D)
G) A) and E) B

Question 4

The ________ of a product line is the price below which all products in the line will be priced.

Accepted Answer

A)   price ceiling
B)   dynamic price
C)   price floor
D)   price lining
E)   online priceF) C) and D)
G) B) and D)

Question 5

Briefly explain how the Internet has affected cost transparency. Include an explanation of the benefits for consumers and the possible disadvantages for marketers.

Accepted Answer

Cost transparency is the ability of consumers to understand a company's True costs. The Internet has greatly increased cost transparency, as information about prices is abundant, easy to find, and free to anyone with Internet access. Internet pricing sites quickly provide information about the prices charged for the same product by different marketers. This benefits consumers financially, but it has four negative effects on pricing strategy for marketers. Increased cost transparency erodes high margins because consumers develop a better understanding of product costs. Cost transparency can also cause customers to treat goods and services as commodities sold at a common market price rather than differentiated, distinct products. Companies that charge more than others for the same product may cause consumers to perceive price unfairness, and customer loyalty to brands may be weakened.

Question 6

A(n)  ________ is a limit on the amount of a product that can be imported into a country.

Accepted Answer

A)   quota
B)   exchange rate
C)   tariff
D)   antidumping law
E)   antitrust rateF) B) and E)
G) B) and C)

Question 7

The ________ Act created the regulatory body that investigates unfair trade practices.

Accepted Answer

A)   Federal Trade Commission
B)   Clayton
C)   Sherman Antitrust
D)   Consumer Protection
E)   Robinson-PatmanF) D) and E)
G) B) and E)

Question 8

In a(n)  ________ market structure, there are many sellers with very similar products who have no significant pricing power.

Accepted Answer

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

Question 9

Briefly explain how changes in currency exchange rates can affect a multinational company's pricing strategies.

Accepted Answer

Marketers have no control over how excha...

Question 10

A company's profit is equal to its ________ minus its ________.

Accepted Answer

A)   markup; total costs
B)   revenue; total costs
C)   markup; fixed costs
D)   revenue; variable costs
E)   profit margin; variable costsF) A) and B)
G) D) and E)

Question 11

Describe what a demand curve is and explain how it helps businesses.

Accepted Answer

A demand curve, or demand schedule, esti...

Question 12

Ascot Tires has decided to decrease its prices. The company can expect that ________ for their product will increase.

Accepted Answer

A)   cost-plus pricing
B)   value-based pricing
C)   demand
D)   the experience curve
E)   competitionF) B) and E)
G) A) and E)

Question 13

Some retailers advertise items at very low prices or even below cost just to get customers into the store. This ________ strategy is prohibited in some states.

Accepted Answer

A)   bait-and-switch
B)   price lining
C)   predatory pricing
D)   loss leader pricing
E)   dynamic pricingF) B) and D)
G) A) and E)

Question 14

A business using price lining is doing which of the following?

Accepted Answer

A)   trying to avoid the use of psychological pricing, which may be negatively received by customers
B)   trying to recoup its research and development costs for a new product
C)   attempting to attain a large market share before any competitors can enter the marketplace
D)   creating different prices for different products within a product line
E)   engaging in potentially unethical pricingF) B) and E)
G) A) and B)

Question 15

In the competitive bidding process, all bids should be blind so communication between buyer and sellers remains confidential.

Accepted Answer

A) True 
 B)False

Question 16

________ establishes a price based on the cost to manufacture a product or deliver a service.

Accepted Answer

A)   Value-based pricing
B)   Fixed cost pricing
C)   Cost-based pricing
D)   A skimming price
E)   Price bundlingF) A) and D)
G) B) and E)

Question 17

In a(n)  ________ market structure, there are several sellers, each having slightly different products with unique customer benefits.

Accepted Answer

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

Question 18

Value Meal Deals at a fast food restaurant in which you get a sandwich, fries, and a drink for one price are an example of price bundling.

Accepted Answer

A) True 
 B)False  True

Question 19

The Pure Drug Company produces insulin, a product with a very stable demand, even though the price has changed several times in the past two years. Insulin is a product with ________ demand.

Accepted Answer

A)   joint
B)   service
C)   inelastic
D)   elastic
E)   fluctuatingF) B) and D)
G) C) and D)

Question 20

Storefront pricing is also known as offline pricing.

Accepted Answer

A) True 
 B)False

Exam 13: Pricing Strategies

The less the demand, the it pays for the seller to raise the price.

Correct Answer
verified

Which of the following is NOT a type of pricing objective?

Correct Answer
verified

As production workers become better organized and more familiar with equipment, the average cost per unit decreases. This is called the ________.

Correct Answer
verified
B

The ________ of a product line is the price below which all products in the line will be priced.

Correct Answer
verified

Briefly explain how the Internet has affected cost transparency. Include an explanation of the benefits for consumers and the possible disadvantages for marketers.

A(n) ________ is a limit on the amount of a product that can be imported into a country.

Correct Answer
verified

The ________ Act created the regulatory body that investigates unfair trade practices.

Correct Answer
verified

In a(n) ________ market structure, there are many sellers with very similar products who have no significant pricing power.

Correct Answer
verified

Briefly explain how changes in currency exchange rates can affect a multinational company's pricing strategies.

Correct Answer
verified
Marketers have no control over how excha...
View Answer

A company's profit is equal to its minus its .

Correct Answer
verified

Describe what a demand curve is and explain how it helps businesses.

Correct Answer
verified
A demand curve, or demand schedule, esti...
View Answer

Ascot Tires has decided to decrease its prices. The company can expect that ________ for their product will increase.

Correct Answer
verified

Some retailers advertise items at very low prices or even below cost just to get customers into the store. This ________ strategy is prohibited in some states.

Correct Answer
verified

A business using price lining is doing which of the following?

Correct Answer
verified

In the competitive bidding process, all bids should be blind so communication between buyer and sellers remains confidential.

Correct Answer
verified

________ establishes a price based on the cost to manufacture a product or deliver a service.

Correct Answer
verified

In a(n) ________ market structure, there are several sellers, each having slightly different products with unique customer benefits.

Correct Answer
verified

Value Meal Deals at a fast food restaurant in which you get a sandwich, fries, and a drink for one price are an example of price bundling.

Correct Answer
verified
True

The Pure Drug Company produces insulin, a product with a very stable demand, even though the price has changed several times in the past two years. Insulin is a product with ________ demand.

Correct Answer
verified

Storefront pricing is also known as offline pricing.

Correct Answer
verified

Exam 13: Pricing Strategies

The less ________ the demand, the ________ it pays for the seller to raise the price.

Correct AnswerverifiedShow Answer

Which of the following is NOT a type of pricing objective?

Correct AnswerverifiedShow Answer

As production workers become better organized and more familiar with equipment, the average cost per unit decreases. This is called the ________.

Correct AnswerverifiedB

The ________ of a product line is the price below which all products in the line will be priced.

Correct AnswerverifiedShow Answer

Briefly explain how the Internet has affected cost transparency. Include an explanation of the benefits for consumers and the possible disadvantages for marketers.

A(n) ________ is a limit on the amount of a product that can be imported into a country.

Correct AnswerverifiedShow Answer

The ________ Act created the regulatory body that investigates unfair trade practices.

Correct AnswerverifiedShow Answer

In a(n) ________ market structure, there are many sellers with very similar products who have no significant pricing power.

Correct AnswerverifiedShow Answer

Briefly explain how changes in currency exchange rates can affect a multinational company's pricing strategies.

Correct AnswerverifiedMarketers have no control over how excha...View AnswerShow Answer

A company's profit is equal to its ________ minus its ________.

Correct AnswerverifiedShow Answer

Describe what a demand curve is and explain how it helps businesses.

Correct AnswerverifiedA demand curve, or demand schedule, esti...View AnswerShow Answer

Ascot Tires has decided to decrease its prices. The company can expect that ________ for their product will increase.

Correct AnswerverifiedShow Answer

Some retailers advertise items at very low prices or even below cost just to get customers into the store. This ________ strategy is prohibited in some states.

Correct AnswerverifiedShow Answer

A business using price lining is doing which of the following?

Correct AnswerverifiedShow Answer

In the competitive bidding process, all bids should be blind so communication between buyer and sellers remains confidential.

Correct AnswerverifiedShow Answer

________ establishes a price based on the cost to manufacture a product or deliver a service.

Correct AnswerverifiedShow Answer

In a(n) ________ market structure, there are several sellers, each having slightly different products with unique customer benefits.

Correct AnswerverifiedShow Answer

Value Meal Deals at a fast food restaurant in which you get a sandwich, fries, and a drink for one price are an example of price bundling.

Correct AnswerverifiedTrue

The Pure Drug Company produces insulin, a product with a very stable demand, even though the price has changed several times in the past two years. Insulin is a product with ________ demand.

Correct AnswerverifiedShow Answer

Storefront pricing is also known as offline pricing.

Correct AnswerverifiedShow Answer

The less the demand, the it pays for the seller to raise the price.

Correct Answer
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B

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Marketers have no control over how excha...
View Answer

A company's profit is equal to its minus its .

Correct Answer
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Correct Answer
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A demand curve, or demand schedule, esti...
View Answer

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True

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