Question 1

The more substitutes that exist in a market,

Accepted Answer

A)   the lower the price elasticity for each product.
B)   the greater the income elasticity for each product.
C)   the easier it will be to utilize a target profit pricing strategy.
D)   the more sensitive consumers will be to changes in the price of a particular product.
E)   the more likely the market will be characterized as an oligopoly.

Question 2

The commercial airline industry is considered what type of market?

Accepted Answer

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

Question 3

If a firm in a purely competitive market can differentiate its product or service,it becomes part of a(n) _______ market.

Accepted Answer

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

Question 4

The demand curve for prestige products generally slopes downward due to higher prices.

Accepted Answer

A) True 
 B)False

Question 5

In general,prices should not be based on costs because

Accepted Answer

A)   consumers are cost-conscious.
B)   producers rarely know what their costs are.
C)   consumers make their purchase decisions based on perceived value.
D)   producers need to avoid creating a cost competitive parity debate.
E)   customers are always right.

Question 6

Raymond estimates the fixed costs associated with opening a new bank branch are $500,000.He estimates the branch will attract 1,000 new customers who will cost $50 / year to service each of their accounts.He also expects to generate $100,000 in fees annually from these accounts.What will be the total cost of opening the new branch and remaining open for one year?

Accepted Answer

Total cost = Fixed c...

Question 7

Diane owns a bakery where she sells cupcakes.Two blocks down there is another bakery,CC's Bakery,that sells cupcakes for $1 less than Diane.Diane decides to lower her price and match CC's Bakery prices.What type of pricing strategy is Diane implementing?

Accepted Answer

A)   internal pricing
B)   profit-oriented pricing
C)   competitor-oriented pricing
D)   customer-oriented pricing
E)   sales-oriented pricing

Question 8

What is predatory pricing? What federal acts make it illegal? How are consumers hurt by predatory pricing?

Accepted Answer

Predatory pricing is setting very low pr...

Question 9

When firms set prices similar to those of competitors,they are following a strategy of

Accepted Answer

A)   me-too pricing.
B)   copycat pricing.
C)   competitive parity.
D)   market-broadening pricing.
E)   industry-standard pricing.

Question 10

At the break-even point,profits are maximized.

Accepted Answer

A) True 
 B)False

Exam 14: Pricing Concepts for Establishing Value

At the break-even point,profits are maximized.

Correct Answer
verified

The commercial airline industry is considered what type of market?

Correct Answer
verified

What is predatory pricing? What federal acts make it illegal? How are consumers hurt by predatory pricing?

Correct Answer
verified
Predatory pricing is setting very low pr...
View Answer

The more substitutes that exist in a market,

Correct Answer
verified

Diane owns a bakery where she sells cupcakes.Two blocks down there is another bakery,CC's Bakery,that sells cupcakes for $1 less than Diane.Diane decides to lower her price and match CC's Bakery prices.What type of pricing strategy is Diane implementing?

Correct Answer
verified

The demand curve for prestige products generally slopes downward due to higher prices.

Correct Answer
verified

When firms set prices similar to those of competitors,they are following a strategy of

Correct Answer
verified

In general,prices should not be based on costs because

Correct Answer
verified

If a firm in a purely competitive market can differentiate its product or service,it becomes part of a(n) _______ market.

Correct Answer
verified

Correct Answer
verified
Total cost = Fixed c...
View Answer

Exam 14: Pricing Concepts for Establishing Value

At the break-even point,profits are maximized.

Correct AnswerverifiedShow Answer

The commercial airline industry is considered what type of market?

Correct AnswerverifiedShow Answer

What is predatory pricing? What federal acts make it illegal? How are consumers hurt by predatory pricing?

Correct AnswerverifiedPredatory pricing is setting very low pr...View AnswerShow Answer

The more substitutes that exist in a market,

Correct AnswerverifiedShow Answer

Diane owns a bakery where she sells cupcakes.Two blocks down there is another bakery,CC's Bakery,that sells cupcakes for $1 less than Diane.Diane decides to lower her price and match CC's Bakery prices.What type of pricing strategy is Diane implementing?

Correct AnswerverifiedShow Answer

The demand curve for prestige products generally slopes downward due to higher prices.

Correct AnswerverifiedShow Answer

When firms set prices similar to those of competitors,they are following a strategy of

Correct AnswerverifiedShow Answer

In general,prices should not be based on costs because

Correct AnswerverifiedShow Answer

If a firm in a purely competitive market can differentiate its product or service,it becomes part of a(n) _______ market.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedTotal cost = Fixed c...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Predatory pricing is setting very low pr...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Total cost = Fixed c...
View Answer