Question 1

Jason rents rooms in his hotel for an average of $100 per night.The variable cost per rented room is $20.His fixed costs are $100,000 and his target profit is $20,000.For Jason,to earn his target profit,he will need to rent out ________ rooms.

Accepted Answer

A)   100
B)   1,500
C)   20,000
D)   1,000
E)   It cannot be determined from the information provided.

Question 2

Variable costs,primarily labor and materials,are those costs that vary with

Accepted Answer

A)   seasonal demand.
B)   quality of the product.
C)   automation.
D)   production volume.
E)   all of these.

Question 3

_________________ measures consumers' sensitivity to price changes.

Accepted Answer

A)   Cross-price elasticity of demand
B)   Price elasticity of demand
C)   Income elasticity of demand
D)   Competitive profit elasticity of demand
E)   Inelastic demand price parity B

Question 4

Tess is the marketing manager for a fast food restaurant chain.She uses a target return pricing strategy because her firm's primary objective is to

Accepted Answer

A)   increase profits.
B)   increase sales.
C)   decrease competition.
D)   build customer satisfaction.
E)   broaden the product line.

Question 5

What is cross-shopping and what does it mean for marketers' pricing strategy?

Accepted Answer

Cross-shopping is the pattern of consume...

Question 6

A demand curve shows the relationship between income and demand.

Accepted Answer

A) True 
 B)False

Question 7

Rarely is the lowest-price product offering the dominant brand in a given market.

Accepted Answer

A) True 
 B)False

Question 8

Price elasticity of demand is the

Accepted Answer

A)   percentage change in quantity demanded divided by the percentage change in price.
B)   percentage change in price divided by percentage change in quantity demanded.
C)   change in price divided by change in quantity demanded.
D)   change in quantity demanded divided by the change in price.
E)   change in quantity demanded multiplied by the change in price.

Question 9

Karen initially charged $80 for an hour-long massage and averaged 20 clients per week.When she raised her price to $100,the number of massages decreased to 15 per week.What is the price elasticity of demand for her service?

Accepted Answer

Price elasticity of demand is the percen...

Question 10

Ryan gave the manager of his convenience store a set of binoculars so she could see the gasoline prices charged by the other convenience store at that intersection.Ryan told the manager to always match the gasoline prices of the other store.Ryan is using a _____________________ pricing strategy.

Accepted Answer

A)   maximizing profits
B)   target profit
C)   target return
D)   status quo
E)   sales D

Question 11

Sales of national brands of orange juice tend to increase when the economy is doing well,while sales of generic orange juice increase when the economy is not doing well.Among industry members this is called the "orange juice indicator." This is an example of how ____________ impacts demand for products.

Accepted Answer

A)   the substitution effect
B)   the price inelasticity coefficient
C)   the income effect
D)   the target return effect
E)   cross-price elasticity

Question 12

A customer orientation toward pricing implicitly invokes the concept of

Accepted Answer

A)   knowing the dimensions of the target market.
B)   positioning.
C)   the income effect.
D)   value.
E)   None of these.

Question 13

Managers of Wendy's fast food restaurants keep track of prices at competitors such as McDonald's,Burger King,and Arby's,knowing that a decrease in the prices at these other fast food restaurants will

Accepted Answer

A)   increase the income effect for their products.
B)   increase demand for their products.
C)   decrease the income effect for their products.
D)   increase the complementary effect for their products.
E)   decrease demand for their products.

Question 14

How is the price elasticity for Crest toothpaste likely to be different from the price elasticity for all toothpastes (a product category)? Why are they likely to be different?

Accepted Answer

The price elasticity for Crest toothpast...

Question 15

Marketers spend millions of dollars annually trying to create or reinforce brand loyalty.Brand loyalty changes the demand curve for the firm's products by

Accepted Answer

A)   reducing the price elasticity of demand.
B)   making demand more oligopolistic and less monopolistic.
C)   increasing the income effect.
D)   reducing fixed costs and increasing the gray marketing effect.
E)   shifting the market from a monopoly to pure competition.

Question 16

A demand curve is built assuming that

Accepted Answer

A)   income is derived from demand.
B)   price remains the same,and fixed costs change.
C)   everything but price and demand remains the same.
D)   a change in quantity demanded causes a change in price.
E)   the firm does not advertise.

Question 17

Price is the cash expenditure plus taxes that consumers have to pay for a good or service.

Accepted Answer

A) True 
 B)False  False

Question 18

In a market with _______________,there are many firms providing differentiated products.

Accepted Answer

A)   pure competition
B)   oligopolistic competition
C)   monopolistic competition
D)   a monopoly
E)   a duopoly

Question 19

In _______________,many firms provide similar products that are considered substitutes for each other.

Accepted Answer

A)   pure competition
B)   oligopolistic competition
C)   monopolistic competition
D)   a monopoly
E)   a duopoly

Question 20

In addition to the product-specific and firm-specific factors that affect pricing,there are two broader factors: the Internet and sociocultural factors.

Accepted Answer

A) True 
 B)False

Exam 14: Pricing Concepts for Establishing Value

Jason rents rooms in his hotel for an average of $100 per night.The variable cost per rented room is $20.His fixed costs are $100,000 and his target profit is $20,000.For Jason,to earn his target profit,he will need to rent out ________ rooms.

Correct Answer
verified

Variable costs,primarily labor and materials,are those costs that vary with

Correct Answer
verified

_________________ measures consumers' sensitivity to price changes.

Correct Answer
verified
B

Tess is the marketing manager for a fast food restaurant chain.She uses a target return pricing strategy because her firm's primary objective is to

Correct Answer
verified

What is cross-shopping and what does it mean for marketers' pricing strategy?

Correct Answer
verified
Cross-shopping is the pattern of consume...
View Answer

A demand curve shows the relationship between income and demand.

Correct Answer
verified

Rarely is the lowest-price product offering the dominant brand in a given market.

Correct Answer
verified

Price elasticity of demand is the

Correct Answer
verified

Karen initially charged $80 for an hour-long massage and averaged 20 clients per week.When she raised her price to $100,the number of massages decreased to 15 per week.What is the price elasticity of demand for her service?

Correct Answer
verified
Price elasticity of demand is the percen...
View Answer

Ryan gave the manager of his convenience store a set of binoculars so she could see the gasoline prices charged by the other convenience store at that intersection.Ryan told the manager to always match the gasoline prices of the other store.Ryan is using a _____________________ pricing strategy.

Correct Answer
verified
D

Correct Answer
verified

A customer orientation toward pricing implicitly invokes the concept of

Correct Answer
verified

Managers of Wendy's fast food restaurants keep track of prices at competitors such as McDonald's,Burger King,and Arby's,knowing that a decrease in the prices at these other fast food restaurants will

Correct Answer
verified

How is the price elasticity for Crest toothpaste likely to be different from the price elasticity for all toothpastes (a product category)? Why are they likely to be different?

Correct Answer
verified
The price elasticity for Crest toothpast...
View Answer

Marketers spend millions of dollars annually trying to create or reinforce brand loyalty.Brand loyalty changes the demand curve for the firm's products by

Correct Answer
verified

A demand curve is built assuming that

Correct Answer
verified

Price is the cash expenditure plus taxes that consumers have to pay for a good or service.

Correct Answer
verified
False

In a market with _______________,there are many firms providing differentiated products.

Correct Answer
verified

In _______________,many firms provide similar products that are considered substitutes for each other.

Correct Answer
verified

In addition to the product-specific and firm-specific factors that affect pricing,there are two broader factors: the Internet and sociocultural factors.

Correct Answer
verified

Exam 14: Pricing Concepts for Establishing Value

Jason rents rooms in his hotel for an average of $100 per night.The variable cost per rented room is $20.His fixed costs are $100,000 and his target profit is $20,000.For Jason,to earn his target profit,he will need to rent out ________ rooms.

Correct AnswerverifiedShow Answer

Variable costs,primarily labor and materials,are those costs that vary with

Correct AnswerverifiedShow Answer

_________________ measures consumers' sensitivity to price changes.

Correct AnswerverifiedB

Tess is the marketing manager for a fast food restaurant chain.She uses a target return pricing strategy because her firm's primary objective is to

Correct AnswerverifiedShow Answer

What is cross-shopping and what does it mean for marketers' pricing strategy?

Correct AnswerverifiedCross-shopping is the pattern of consume...View AnswerShow Answer

A demand curve shows the relationship between income and demand.

Correct AnswerverifiedShow Answer

Rarely is the lowest-price product offering the dominant brand in a given market.

Correct AnswerverifiedShow Answer

Price elasticity of demand is the

Correct AnswerverifiedShow Answer

Karen initially charged $80 for an hour-long massage and averaged 20 clients per week.When she raised her price to $100,the number of massages decreased to 15 per week.What is the price elasticity of demand for her service?

Correct AnswerverifiedPrice elasticity of demand is the percen...View AnswerShow Answer

Ryan gave the manager of his convenience store a set of binoculars so she could see the gasoline prices charged by the other convenience store at that intersection.Ryan told the manager to always match the gasoline prices of the other store.Ryan is using a _____________________ pricing strategy.

Correct AnswerverifiedD

Correct AnswerverifiedShow Answer

A customer orientation toward pricing implicitly invokes the concept of

Correct AnswerverifiedShow Answer

Managers of Wendy's fast food restaurants keep track of prices at competitors such as McDonald's,Burger King,and Arby's,knowing that a decrease in the prices at these other fast food restaurants will

Correct AnswerverifiedShow Answer

How is the price elasticity for Crest toothpaste likely to be different from the price elasticity for all toothpastes (a product category)? Why are they likely to be different?

Correct AnswerverifiedThe price elasticity for Crest toothpast...View AnswerShow Answer

Marketers spend millions of dollars annually trying to create or reinforce brand loyalty.Brand loyalty changes the demand curve for the firm's products by

Correct AnswerverifiedShow Answer

A demand curve is built assuming that

Correct AnswerverifiedShow Answer

Price is the cash expenditure plus taxes that consumers have to pay for a good or service.

Correct AnswerverifiedFalse

In a market with _______________,there are many firms providing differentiated products.

Correct AnswerverifiedShow Answer

In _______________,many firms provide similar products that are considered substitutes for each other.

Correct AnswerverifiedShow Answer

In addition to the product-specific and firm-specific factors that affect pricing,there are two broader factors: the Internet and sociocultural factors.

Correct AnswerverifiedShow Answer

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B

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Cross-shopping is the pattern of consume...
View Answer

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Price elasticity of demand is the percen...
View Answer

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D

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The price elasticity for Crest toothpast...
View Answer

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False

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