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An online movie streaming service charges $14.99 per month for its basic package. However, when a competitor introduced the same service at $13.99, the firm dropped its price to $13.99. The firm most likely made this price reduction in an attempt to


A) decrease revenue but increase profit.
B) increase profit by decreasing revenue.
C) maintain market share.
D) decrease market share.
E) increase efficiency.

F) A) and E)
G) None of the above

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Tim Marlow, the owner of The Clock Works, wanted to know how many clocks he must sell in order to cover his fixed cost at a given price. Marloq knew that he had total fixed costs of $20,000 for equipment, taxes, and a bank loan. He also had a unit variable cost of $20 per clock for labor and materials. If the price Marlow charges for each of his clocks is $40, what is his break-even point quantity?


A) 100 clocks
B) 334 clocks
C) 500 clocks
D) 1,000 clocks
E) 10,000 clocks

F) A) and E)
G) A) and D)

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When Pizza Hut announced it was going to add 25 percent more toppings to its Meat Lover's line of pizzas without increasing prices, what consumer motivation was it appealing to?


A) cost
B) appearance
C) value
D) price
E) quality

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

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The vertical axis of a demand curve graph represents


A) market growth rate.
B) relative market share.
C) price per unit.
D) potential profit in dollars.
E) quantity demanded.

F) C) and E)
G) B) and D)

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Suppose you are the owner of a picture frame store and you wish to calculate how many frames you must sell to cover your fixed and variable costs at a given price. Let's assume that the demand for your frames is strong, so the average price customers are willing to pay for each picture frame is $120. Also, suppose your fixed costs (FC) total $32,000 (real estate taxes, interest on a bank loan, etc.) and unit variable cost (UVC) for a picture frame is $50 (labor, glass, frame, and matting) . If your picture frame store sold 2,000 picture frames, what would your profit (or loss) be?


A) a loss of $32,000
B) $0-only able to break even
C) $100,000 profit
D) $108,000 profit
E) $132,000 profit

F) A) and B)
G) D) and E)

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Describe a profit objective used by many Japanese manufacturing firms.

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Managing for long-run profits is a prici...

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The marketplace sets the price for wheat, so farmers who are trying to sell their wheat crops don't have to create a pricing strategy. The wheat is sold in __________ type of competitive market.


A) an oligopoly
B) a pure monopoly
C) a pure competition
D) a monopolistic competition
E) a monopolistic oligopoly

F) A) and E)
G) A) and B)

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Barter refers to


A) a reciprocity agreement stipulating that if company "A" purchases services from company "B," then company "B" must purchase similar services from company "A."
B) a tying agreement stipulating that if company "A" purchases a product from company "B," it must also purchase one of its services.
C) the practice of exchanging products and services for other products and services rather than for money.
D) the practice of exchanging services for products of equal or greater value.
E) the practice of exchanging products and services for money.

F) B) and C)
G) B) and D)

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Market share is the ratio of the __________ to those of the industry, including the firm itself.


A) target return on sales
B) marginal profit of the firm
C) firm's sales revenues or unit sales
D) marketing expenses of the firm
E) profits of the firm

F) A) and B)
G) B) and E)

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Acme Shoe Co. sells heel replacement kits for men's shoes. It has fixed costs of $9 million and unit variable costs of $5 per pair. Acme is considering a switch from manual labor to an automated process. New equipment would cost an additional $4 million per year while lowering variable costs by $3 per shoe repair kit. How many kits would Acme have to sell at $17 per pair to make $2 million in profit in the next year with the automated process?


A) 117,648 kits
B) 428,572 kits
C) 705,883 kits
D) 916,667 kits
E) 1,000,000 kits

F) A) and B)
G) None of the above

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Selecting an approximate price level would occur during __________ of the price-setting process.


A) Step 1
B) Step 2
C) Step 3
D) Step 4
E) Step 5

F) B) and E)
G) None of the above

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A reference value


A) is relative to the amount of time and energy a consumer puts into the purchase process.
B) is based upon the value assigned to similar items used by the consumer's peers.
C) results from performing a careful break-even analysis.
D) involves comparing the costs and benefits of substitute items.
E) is based upon the differential between customers' "needs" and "wants."

F) A) and C)
G) B) and D)

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The competitive market situation in which one seller sets the price for a unique product is referred to as


A) pure monopoly.
B) oligopoly.
C) monopolistic competition.
D) pure competition.
E) monopolistic oligopoly.

F) None of the above
G) B) and C)

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A primary reason for Washburn Guitars' success is


A) underselling competitors by mass-producing fine-quality guitars.
B) developing product lines at different price points for different market segments.
C) offering significant price breaks to well-known performers in exchange for product endorsements.
D) selling traditional American "rock 'n roll" guitars in global markets.
E) setting up free music programs and donating low-price-point guitars to students in schools that have lost their music programs due to budget constraints.

F) B) and C)
G) C) and D)

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Barter is the practice of exchanging products and services for other products and services rather than for


A) value.
B) ideas.
C) promises.
D) tariffs.
E) money.

F) A) and B)
G) B) and C)

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According to the price equation, final price equals list price minus __________ plus extra fees.


A) profits
B) commissions
C) trade-ins
D) taxes
E) incentives and allowances

F) C) and E)
G) B) and C)

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All of the following are examples of pricing constraints except


A) familiarity of the product.
B) competitors' prices.
C) newness of the product.
D) social responsibility.
E) demand for the product class, product, or brand.

F) All of the above
G) C) and E)

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The total money received from the sale of a product is referred to as


A) profit.
B) total revenue.
C) average revenue.
D) marginal revenue.
E) derived demand.

F) A) and B)
G) None of the above

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Jane Westerlund owns a picture-framing store, The Caplow Co. The average price she receives for a framed picture is $120. This price must cover her costs for a typical framed picture, which consists of $5 for glass, $2 for matting, $13 for the frame, and $30 for the labor involved. She must also cover monthly expenses of $1,000 for rent and insurance, $200 for heat and electricity, $500 for advertising, and $3,500 for her salary. Assuming there is no change in price or the quantity demanded, if Westerlund wants to increase her advertising expenses to a total of $1,000 (a $500 increase) , this would cause total costs to __________ and the break-even quantity to __________.


A) decrease; stay the same
B) increase; increase
C) decrease; increase
D) stay the same; increase
E) stay the same; decrease

F) D) and E)
G) All of the above

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All of the following are synonyms for price except


A) a premium.
B) barter.
C) tuition.
D) a commission.
E) profit.

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

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Showing 21 - 40 of 242

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