Question 1

When estimating demand, price is not the only factor to be considered. Three other elements emphasized by economists are consumer tastes, price and availability of similar products, and

Accepted Answer

A)  consumer income.
B)  consumer psychographics.
C)  size of the target market.
D)  current political agendas.
E)  green substitutes.F) A) and C)
G) C) and E)

Question 2

Which of the following is a typical example of a variable cost?

Accepted Answer

A)  shipping costs
B)  rent on a building
C)  executive salaries
D)  insurance premiums
E)  leases on delivery trucksF) A) and B)
G) None of the above

Question 3

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

Accepted Answer

A)  first-time buyers.
B)  professional musicians.
C)  celebrities.
D)  large institutional buyers such as band programs.
E)  intermediate-skill players who may become professional musicians.F) None of the above
G) B) and C)

Question 4

Economists have identified four types of competitive markets: pure monopoly, monopolistic competition, oligopoly, and

Accepted Answer

A)  pure competition.
B)  government-dominated.
C)  capitalist.
D)  socialist.
E)  communist.F) D) and E)
G) A) and C)

Question 5

Pricing objectives refers to

Accepted Answer

A)  reconciling the prices charged by an organization to the values set forth in its business mission.
B)  taking specific steps to capitalize on an organization's internal strengths as they apply to price.
C)  specifying the role of price in an organization's marketing and strategic plans.
D)  taking specific steps to compensate for an organization's weaknesses as they apply to price.
E)  subjectively setting intrinsic values to all products and services offered by an organization.F) A) and E)
G) None of the above

Question 6

Three different objectives relate to a firm's profit, which have different implications for pricing strategy. The three profit-oriented objectives include managing for long-run profits, maximizing current profit objectives, and

Accepted Answer

A)  accumulating profits.
B)  reinvesting profits.
C)  redistributing profits.
D)  maximizing gross margin.
E)  achieving a target return.F) All of the above
G) A) and E)

Question 7

The marketing director for __________ is most likely to believe the following statement: "The purpose of advertising is to increase demand for the product class."

Accepted Answer

A)  an oligopolistic competitor
B)  a monopolistic competitor
C)  a pure competition competitor
D)  a pure monopolist competitor
E)  a competitive oligopolistic competitorF) B) and C)
G) A) and E)

Question 8

The ratio of __________ to price is referred to as value.

Accepted Answer

A)  prestige value
B)  perceived benefits
C)  costs
D)  perceived quality
E)  profitsF) A) and D)
G) C) and D)

Question 9

Which of the following statements is most accurate?

Accepted Answer

A)  Nonprofit organizations are exempt from having to cover the costs of producing and/or marketing their products.
B)  Socially responsible corporations should have the pricing constraint of covering all costs of producing and marketing their products, but they should not price their products to earn a profit.
C)  Marketers must ensure that firms in their channels of distribution make an adequate profit or they will be cut off from their customers.
D)  Price elasticity of demand makes it virtually impossible for companies to cover all their marketing and production costs at all times.
E)  Marketing and production costs are the most difficult and expensive aspect of pricing because they draw so much capital away from other departments in the organization.F) All of the above
G) B) and D)

Question 10

Total revenue refers to

Accepted Answer

A)  the profit made from selling a product or service.
B)  the net gain in sales revenue if the unit price is lowered.
C)  the least number of units sold needed to cover product, distribution, and promotional costs.
D)  the amount at which marginal costs exceed fixed costs.
E)  the total money received from the sale of a product.F) All of the above
G) A) and E)

Question 11

The total expense incurred by a firm in producing and marketing a product, which equals the sum of fixed cost and variable cost, is referred to as

Accepted Answer

A)  overhead cost.
B)  total cost.
C)  unit cost.
D)  average cost.
E)  marginal cost.F) B) and D)
G) A) and B) B

Question 12

Basic to setting a product's price is the extent of __________. This information is used in estimating the revenues the firm expects to receive.

Accepted Answer

A)  management's commitment to the product relative to other products in the line
B)  curiosity or interest potential consumers expressed during market testing
C)  customer demand for it
D)  the firm's promotional budget
E)  distribution requirementsF) B) and E)
G) A) and B)

Question 13

Susan O'Rourke hired an attorney to represent her in a court case involving an auto accident. The attorney charged O'Rourke a $2,000 retainer fee for his services. Terry Thomas needed a haircut; the local stylist charged him $12 for her services. Aaron Mathison mowed his neighbor's lawn; in exchange, the neighbor rototilled Mathison's garden. The attorney fees paid by O'Rourke, the $12 charged by the hair stylist, and the exchange of lawn mowing for garden tilling are all examples of

Accepted Answer

A)  premiums.
B)  barter.
C)  the profit motive.
D)  price.
E)  outlays.F) A) and B)
G) C) and D) D

Question 14

Several companies produce latex gloves that are used in a variety of different industries. If one of the glove manufacturers decreases its price by just a few percentage points, it will result in a significant increase in quantity demanded. The demand for latex gloves is

Accepted Answer

A)  synergistic.
B)  inelastic.
C)  unitary.
D)  elastic.
E)  static.F) C) and D)
G) A) and C)

Question 15

Inelastic demand exists when

Accepted Answer

A)  a small percentage decrease in price produces a smaller percentage increase in quantity demanded.
B)  a small percentage increase in price produces a larger percentage increase in quantity demanded.
C)  an increase in price is impossible due to government restrictions.
D)  the quantity demanded remains the same regardless of any changes in marketing strategies.
E)  a small percentage decrease in price produces a smaller percentage increase in quantity supplied.F) B) and C)
G) A) and B)

Question 16

A graphic presentation of the break-even analysis that shows when total revenue and total cost intersect to identify profit or loss for a given quantity sold is referred to as a

Accepted Answer

A)  Gantt chart.
B)  demand curve.
C)  ROI analysis.
D)  cross-tabulation.
E)  break-even chart.F) B) and C)
G) A) and E) E

Question 17

Which of the following statements about the factors that influence demand is true?

Accepted Answer

A)  As the availability of close substitutes increases, the demand for a product increases.
B)  As real consumer income increases, the demand for a product increases.
C)  As the price of close substitutes increases, the demand for a product declines.
D)  Changing consumer tastes have little impact on the demand for a product.
E)  As real consumer income decreases, the demand for a product increases.F) D) and E)
G) A) and E)

Question 18

Which of the following statements regarding the seller's price is most accurate?

Accepted Answer

A)  Internet price changes are regulated by the Internet Fair Practices Act to protect consumers against price gouging.
B)  The seller's price is constrained by the type of market within which it competes.
C)  Price changes cannot be regulated in a monopoly.
D)  The type of market has little or no impact on a firm in a monopolistic competitive environment.
E)  Competitive environments should affect a firm's pricing objectives, but not its actual product prices.F) None of the above
G) A) and E)

Question 19

Forever Quilting is a small company that makes quilting kits priced at $120 each. There is no quantity discount. The costs of the materials that go into each kit total $45. It costs $5 in labor to assemble a kit. The company has monthly expenses of $1,000 for rent and insurance, $200 for heat and electricity, $500 for advertising, and $4,500 for the monthly salary of its owner. Last month the company sold 150 kits. Forever Quilting's total revenue for the month was

Accepted Answer

A)  $4,300.
B)  $6,200.
C)  $7,500.
D)  $10,500.
E)  $18,000.F) B) and E)
G) A) and E)

Question 20

Campbell Soup spent seven years and $55 million on a secret project to produce a line of Intelligent Quisine (IQ)  food products "scientifically proven to lower high levels of cholesterol, blood sugar, and blood pressure." The company was responding to the needs and desires expressed by consumers. However, after 15 months in an Ohio test market, Campbell Soup yanked the entire IQ line because

Accepted Answer

A)  Progresso Soups got to the stores first with a similar product and dominated the shelf space.
B)  the product's claims were exaggerated and not backed up with scientific data.
C)  the product was priced too high and there was too little product variety.
D)  the price was too low, leaving the consumer believing that Campbell sacrificed taste for nutrition.
E)  a downturn in the economy shifted people's desire from a healthy lifestyle to a desire for home and comfort. The new soups were too different from the product they remembered as children.F) A) and E)
G) A) and D)

Exam 13: Building the Price Foundation

When estimating demand, price is not the only factor to be considered. Three other elements emphasized by economists are consumer tastes, price and availability of similar products, and

Correct Answer
verified

Which of the following is a typical example of a variable cost?

Correct Answer
verified

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

Correct Answer
verified

Economists have identified four types of competitive markets: pure monopoly, monopolistic competition, oligopoly, and

Correct Answer
verified

Pricing objectives refers to

Correct Answer
verified

Three different objectives relate to a firm's profit, which have different implications for pricing strategy. The three profit-oriented objectives include managing for long-run profits, maximizing current profit objectives, and

Correct Answer
verified

The marketing director for __________ is most likely to believe the following statement: "The purpose of advertising is to increase demand for the product class."

Correct Answer
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The ratio of __________ to price is referred to as value.

Correct Answer
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Which of the following statements is most accurate?

Correct Answer
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Total revenue refers to

Correct Answer
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The total expense incurred by a firm in producing and marketing a product, which equals the sum of fixed cost and variable cost, is referred to as

Correct Answer
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B

Basic to setting a product's price is the extent of __________. This information is used in estimating the revenues the firm expects to receive.

Correct Answer
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D

Several companies produce latex gloves that are used in a variety of different industries. If one of the glove manufacturers decreases its price by just a few percentage points, it will result in a significant increase in quantity demanded. The demand for latex gloves is

Correct Answer
verified

Inelastic demand exists when

Correct Answer
verified

A graphic presentation of the break-even analysis that shows when total revenue and total cost intersect to identify profit or loss for a given quantity sold is referred to as a

Correct Answer
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E

Which of the following statements about the factors that influence demand is true?

Correct Answer
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Which of the following statements regarding the seller's price is most accurate?

Correct Answer
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Exam 13: Building the Price Foundation

When estimating demand, price is not the only factor to be considered. Three other elements emphasized by economists are consumer tastes, price and availability of similar products, and

Correct AnswerverifiedShow Answer

Which of the following is a typical example of a variable cost?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Economists have identified four types of competitive markets: pure monopoly, monopolistic competition, oligopoly, and

Correct AnswerverifiedShow Answer

Pricing objectives refers to

Correct AnswerverifiedShow Answer

Three different objectives relate to a firm's profit, which have different implications for pricing strategy. The three profit-oriented objectives include managing for long-run profits, maximizing current profit objectives, and

Correct AnswerverifiedShow Answer

The marketing director for __________ is most likely to believe the following statement: "The purpose of advertising is to increase demand for the product class."

Correct AnswerverifiedShow Answer

The ratio of __________ to price is referred to as value.

Correct AnswerverifiedShow Answer

Which of the following statements is most accurate?

Correct AnswerverifiedShow Answer

Total revenue refers to

Correct AnswerverifiedShow Answer

The total expense incurred by a firm in producing and marketing a product, which equals the sum of fixed cost and variable cost, is referred to as

Correct AnswerverifiedB

Basic to setting a product's price is the extent of __________. This information is used in estimating the revenues the firm expects to receive.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedD

Several companies produce latex gloves that are used in a variety of different industries. If one of the glove manufacturers decreases its price by just a few percentage points, it will result in a significant increase in quantity demanded. The demand for latex gloves is

Correct AnswerverifiedShow Answer

Inelastic demand exists when

Correct AnswerverifiedShow Answer

A graphic presentation of the break-even analysis that shows when total revenue and total cost intersect to identify profit or loss for a given quantity sold is referred to as a

Correct AnswerverifiedE

Which of the following statements about the factors that influence demand is true?

Correct AnswerverifiedShow Answer

Which of the following statements regarding the seller's price is most accurate?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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B

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D

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E

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