Question 1

David manages a Shoney's restaurant.He is considering staying open later in the evening.For David,the variable costs associated with staying open longer hours will include all of the following EXCEPT:

Accepted Answer

A)   ingredients used in preparing food.
B)   hours worked by cooks.
C)   monthly rent on the restaurant building.
D)   energy costs.
E)   hours worked by the waiters and waitresses.F) B) and D)
G) B) and C)

Question 2

Small business consultants are constantly admonishing would-be entrepreneurs,"Beware of the overhead." Use break-even analysis first with an overhead of $100,000 and second with an overhead of $200,000,and a contribution per unit of $50 to demonstrate this admonition.

Accepted Answer

With an overhead of $100,000 and a contr...

Question 3

If the fixed costs of manufacturing a new cell phone are $10,000,the sales price is $60,and variable cost per unit is $20,the break-even point is:

Accepted Answer

A)   100 units.
B)   4,000 units.
C)   20 units.
D)   1,000 units.
E)   250 units.F) B) and C)
G) A) and E)

Question 4

Because there are only a few firms in markets with oligopolistic competition:

Accepted Answer

A)   everyone is a price taker.
B)   producers do not have to consider the reactions of rival firms.
C)   government often encourages consolidation to reduce the number of competitors.
D)   price wars may occur.
E)   the many competitors will focus on product differentiation.F) B) and E)
G) A) and E)

Question 5

Why are price wars more common in oligopolies than in pure competition markets?

Accepted Answer

In oligopolies,there are only a few firm...

Question 6

When HP first introduced their Inkjet printers,consumers could only buy refill cartridges from HP.HP made significant profits from the sale of replacement cartridges.In this situation,HP logically used a __________ pricing strategy for their printers.

Accepted Answer

A)   market penetration
B)   loss leader
C)   price fixing
D)   reference
E)   skimmingF) A) and B)
G) A) and C)

Question 7

Unlike product,promotion,or place,price is the only part of the marketing mix:

Accepted Answer

A)   that offers the opportunity for an oligopoly.
B)   that is subject to gray market manipulation.
C)   that leads to competition.
D)   that generates revenue.
E)   all of these.F) A) and B)
G) B) and E)

Question 8

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.F) D) and E)
G) C) and E)

Question 9

Bill is a yacht broker in the southeastern United States.For years he has had difficulty selling large yachts locally because there were few places to dock these boats.Yachts and spaces to dock them are an example of:

Accepted Answer

A)   substitute products.
B)   purely competitive products.
C)   status quo pricing products.
D)   complementary products.
E)   competitive parity products.F) C) and D)
G) None of the above

Question 10

Break-even analysis is useful because it allows managers to:

Accepted Answer

A)   quantify the relationship between price elasticity and product elasticity.
B)   reposition products based on their break-even positioning revenue.
C)   estimate the quantity they will need to sell at a given price to break even.
D)   determine the relationship between price and quantity demanded.
E)   analyze the different elements contributing to their variable costs.F) A) and D)
G) B) and E)

Question 11

B2B quantity discounts are legal if:

Accepted Answer

A)   the discounts are available to all customers.
B)   they do not exceed 25% of the regular price.
C)   they are not short term.
D)   new customers can "buy up" to reach the minimum quantity.
E)   cumulative discounts do not run for more than a calendar year.F) B) and E)
G) A) and E)

Question 12

In a(n) __________ pricing strategy,marketers rely on the promotion of sales,during which prices are temporarily reduced to encourage purchases.

Accepted Answer

A)   high / low
B)   premium
C)   discount
D)   everyday low pricing
E)   vertical triangulationF) C) and E)
G) None of the above

Question 13

What type of pricing tactic is being used when several airlines agree to charge the same fare for a single route.

Accepted Answer

A)   Horizontal price fixing
B)   Vertical price fixing
C)   Horizontal price discrimination
D)   Vertical price discrimination
E)   Loss leader pricingF) A) and E)
G) A) and C)

Question 14

Customers purchase prestige products or services for the status of owning the products,not just for the functionality.These products may not follow a typical demand curve if:

Accepted Answer

A)   people don't know the price.
B)   raising the price makes more people want to own one.
C)   similar products become less expensive.
D)   the marketer can demonstrate that functionality is more important than prestige.
E)   value is removed from the equation.F) C) and D)
G) B) and C)

Question 15

A demand curve shows the relationship between income and demand.

Accepted Answer

A) True 
 B)False

Question 16

When working on pricing,the marketer must carefully consider the objectives of other channel members to ensure:

Accepted Answer

A)   everyone makes as much profit as possible.
B)   the manufacturer remains in control of the marketing channel.
C)   pricing is consistently handled by all participants in the channel.
D)   "image" does not get in the way of effective pricing.
E)   All of these.F) A) and D)
G) A) and B)

Question 17

Julia's is an upscale women's clothing store.Prices are based on customers' beliefs about the value of the clothing.The store focuses on a limited target market and provides excellent customer service.Julia's is using a __________ pricing strategy.

Accepted Answer

A)   customer-oriented
B)   target profit
C)   target return
D)   status quo
E)   maximizing profitsF) A) and B)
G) A) and C)

Question 18

Customers must see value in a product or service before they are willing to exchange time or money to obtain it,but not all customers see the same value in a product.To analyze how many units will be sold at any given price point,marketers draw on:

Accepted Answer

A)   a demand curve.
B)   the law of averages.
C)   multiple regression analyses.
D)   target return strategies.
E)   a sales orientation.F) C) and D)
G) B) and E)

Question 19

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

Accepted Answer

Cross-shopping is the pattern of consume...

Question 20

__________ occurs when members of the marketing channel collude to control the prices passed on to consumers.

Accepted Answer

A)   Loss leader price fixing
B)   Bait and switch price fixing
C)   Horizontal price fixing
D)   Vertical price fixing
E)   Predatory pricingF) A) and C)
G) A) and B)

Exam 13: Pricing Concepts for Establishing Value

Break-even analysis is useful because it allows managers to:

Correct AnswerverifiedShow Answer

Small business consultants are constantly admonishing would-be entrepreneurs,"Beware of the overhead." Use break-even analysis first with an overhead of $100,000 and second with an overhead of $200,000,and a contribution per unit of $50 to demonstrate this admonition.

Correct AnswerverifiedWith an overhead of $100,000 and a contr...View AnswerShow Answer

Customers purchase prestige products or services for the status of owning the products,not just for the functionality.These products may not follow a typical demand curve if:

Correct AnswerverifiedShow Answer

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

What type of pricing tactic is being used when several airlines agree to charge the same fare for a single route.

Correct AnswerverifiedShow Answer

A demand curve shows the relationship between income and demand.

Correct AnswerverifiedShow Answer

Bill is a yacht broker in the southeastern United States.For years he has had difficulty selling large yachts locally because there were few places to dock these boats.Yachts and spaces to dock them are an example of:

Correct AnswerverifiedShow Answer

B2B quantity discounts are legal if:

Correct AnswerverifiedShow Answer

David manages a Shoney's restaurant.He is considering staying open later in the evening.For David,the variable costs associated with staying open longer hours will include all of the following EXCEPT:

Correct AnswerverifiedShow Answer

Customers must see value in a product or service before they are willing to exchange time or money to obtain it,but not all customers see the same value in a product.To analyze how many units will be sold at any given price point,marketers draw on:

Correct AnswerverifiedShow Answer

Julia's is an upscale women's clothing store.Prices are based on customers' beliefs about the value of the clothing.The store focuses on a limited target market and provides excellent customer service.Julia's is using a __________ pricing strategy.

Correct AnswerverifiedShow Answer

Because there are only a few firms in markets with oligopolistic competition:

Correct AnswerverifiedShow Answer

When HP first introduced their Inkjet printers,consumers could only buy refill cartridges from HP.HP made significant profits from the sale of replacement cartridges.In this situation,HP logically used a __________ pricing strategy for their printers.

Correct AnswerverifiedShow Answer

In a(n) __________ pricing strategy,marketers rely on the promotion of sales,during which prices are temporarily reduced to encourage purchases.

Correct AnswerverifiedShow Answer

If the fixed costs of manufacturing a new cell phone are $10,000,the sales price is $60,and variable cost per unit is $20,the break-even point is:

Correct AnswerverifiedShow Answer

__________ occurs when members of the marketing channel collude to control the prices passed on to consumers.

Correct AnswerverifiedShow Answer

Unlike product,promotion,or place,price is the only part of the marketing mix:

Correct AnswerverifiedShow Answer

Why are price wars more common in oligopolies than in pure competition markets?

Correct AnswerverifiedIn oligopolies,there are only a few firm...View AnswerShow 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

When working on pricing,the marketer must carefully consider the objectives of other channel members to ensure:

Correct AnswerverifiedShow Answer

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With an overhead of $100,000 and a contr...
View Answer

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In oligopolies,there are only a few firm...
View Answer

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

Correct Answer
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