Question 1

Washburn recently purchased Parker Guitar,another guitar manufacturer that designs products for professionals and collectors,and will combine the two production facilities into a new location.Washburn expects the acquisition to reduce its rent and tax expenses by 40 percent,and the new skilled employees will reduce the hours of work needed for each unit by 15 percent.This would cause the slope of the total cost curve to __________ and the break-even quantity to __________.

Accepted Answer

A)  decrease;stay the same
B)  decrease;increase
C)  increase;increase
D)  stay the same;increase
E)  decrease;decreaseF) B) and E)
G) All of the above

Question 2

The horizontal axis of a demand curve graph represents __________.

Accepted Answer

A)  market growth rate
B)  relative market share
C)  price per unit
D)  potential profit in dollars
E)  quantity demandedF) A) and B)
G) B) and C)

Question 3

Marginal cost is the change in total cost that results from

Accepted Answer

A)  reducing the total number of units produced.
B)  increasing the number of units produced by one percent.
C)  increasing the number of products in a product line.
D)  producing and marketing one additional unit of a product.
E)  the percentage change that results from changing a product feature or service benefit to reduce costs.F) A) and B)
G) C) and D)

Question 4

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) A) and C)
G) C) and D)

Question 5

Step 1 of the price-setting process identifies pricing objectives and constraints.Describe the reasons these objectives may change and give examples of objectives a firm may set.

Accepted Answer

Pricing objectives involve specifying th...

Question 6

Florida Power & Light,an electric power company,is the only source of electricity for consumers in most parts of the Florida panhandle.As a(n) __________,the company receives approval from the state utility commission for the rates it can charge.

Accepted Answer

A)  free enterprise firm
B)  oligopoly
C)  monopolistic competitor
D)  competitor in a pure competition
E)  pure monopolyF) C) and D)
G) None of the above

Question 7

Which of the following would be an example of an objective in Step 1 of the price-setting process?

Accepted Answer

A)  "We need to set an initial price of $259 dollars per unit."
B)  "We need to find the least expensive distributor."
C)  "We need to make a profit of at least $1.2 million."
D)  "We need to make allowances for large quantity orders."
E)  "We need to increase the price during the holiday shopping season."F) None of the above
G) A) and D)

Question 8

For the sake of simplicity and by convention,price elasticity figures are shown as __________.

Accepted Answer

A)  positive numbers (0.64,1.25,etc. ) 
B)  negative numbers (-0.64,-1.25,etc. ) 
C)  Greek letters (∑,∏,etc. ) 
D)  Roman numerals (I,V,X,etc. ) 
E)  English consonants (P,Q,TR,etc. ) F) B) and E)
G) C) and D)

Question 9

A continuing,concise trade-off of incremental costs against incremental revenues is referred to as

Accepted Answer

A)  break-even analysis
B)  demand analysis
C)  marginal analysis
D)  situation analysis
E)  cost-benefit analysisF) A) and E)
G) A) and C)

Question 10

Pure monopoly is the competitive market situation where

Accepted Answer

A)  many sellers follow market price for identical,commodity products.
B)  one seller sets the price for a unique product.
C)  few sellers are sensitive to one another's prices.
D)  many sellers compete on nonprice factors.
E)  one or few sellers compete solely on nonprice factors.F) C) and E)
G) None of the above

Question 11

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

Accepted Answer

A)  value
B)  ideas
C)  promises
D)  tariffs
E)  moneyF) A) and D)
G) B) and D)

Question 12

All of the following statements are true about an oligopolic competitive market situation EXCEPT:

Accepted Answer

A)  the products can be differentiated or undifferentiated.
B)  advertising that uses comparative (head-to-head) messages is the norm.
C)  the purpose of advertising is to inform.
D)  sellers try to avoid price competition,which can lead to price wars.
E)  firms in these markets stay aware of a competitor's price cuts or increases and may follow suit.F) C) and D)
G) None of the above

Question 13

The money or other considerations (including other products and services) exchanged for the ownership or use of a product or service is referred to as __________.

Accepted Answer

A)  a fee
B)  value
C)  renumeration
D)  price
E)  an exchange rateF) B) and D)
G) A) and C)

Question 14

In Figure 13-10 above,which is a break-even chart that depicts a graphic presentation of a break-even analysis for a picture frame store,the red-shaded wedge "ABC" represents the firm's

Accepted Answer

A)  fixed costs.
B)  break-even point.
C)  loss.
D)  profit.
E)  total revenue.F) C) and E)
G) B) and D)

Question 15

Describe the types of competitive markets and give an example of each one.

Accepted Answer

There are four types of competitive mark...

Question 16

Acme Shoe Company sells heel replacement kits for men's shoes.It has fixed costs of $6 million and unit variable costs of $5 per kit.Acme would like to earn a profit of $2 million.How many kits must Acme sell at a price of $15?

Accepted Answer

A)  100,000 kits
B)  400,000 kits
C)  600,000 kits
D)  800,000 kits
E)  1,400,000 kitsF) A) and D)
G) B) and E)

Question 17

Explain the price equation in the context of a new car purchase.

Accepted Answer

The price equation is: Final price = Lis...

Question 18

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

Accepted Answer

A)  pure monopoly.
B)  oligopoly.
C)  monopolistic competition.
D)  pure competition.
E)  monopolistic oligopoly.F) None of the above
G) All of the above

Question 19

Variable cost refers to

Accepted Answer

A)  the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold.
B)  the sum of the expenses of the firm that change with the quantity of a product that is produced and sold.
C)  the total expense incurred by a firm in producing and marketing a product,which equals the sum of fixed cost and marginal cost.
D)  the average amount of money received for selling one unit of a product or simply the price of that unit.
E)  the change in total cost that results from producing and marketing one additional unit of a product.F) A) and C)
G) A) and B)

Question 20

StubHub's pricing formula is to

Accepted Answer

A)  charge an escalating commission percentage based on the value of the ticket sold.
B)  deduct a flat fee of $25 for every ticket sold regardless of its value.
C)  include special surcharges for enabling prospective buyers to view,in 3D 360° streaming video on its YouTube channel,the seats at stadiums,concert halls,and other venues for the events they are interested in.
D)  charge a commission to both buyers and sellers of the tickets sold on its website.
E)  deduct the sales tax from the purchase of tickets based on the states where such taxes must be collected and forwarded.F) A) and C)
G) B) and C)

Exam 13: Building the Price Foundation

Explain the price equation in the context of a new car purchase.

Correct Answer
verified
The price equation is: Final price = Lis...
View Answer

Correct Answer
verified

For the sake of simplicity and by convention,price elasticity figures are shown as __________.

Correct Answer
verified

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

Correct Answer
verified

Step 1 of the price-setting process identifies pricing objectives and constraints.Describe the reasons these objectives may change and give examples of objectives a firm may set.

Correct Answer
verified
Pricing objectives involve specifying th...
View Answer

Describe the types of competitive markets and give an example of each one.

Correct Answer
verified
There are four types of competitive mark...
View Answer

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

Correct Answer
verified

All of the following statements are true about an oligopolic competitive market situation EXCEPT:

Correct Answer
verified

Which of the following would be an example of an objective in Step 1 of the price-setting process?

Correct Answer
verified

Pure monopoly is the competitive market situation where

Correct Answer
verified

Acme Shoe Company sells heel replacement kits for men's shoes.It has fixed costs of $6 million and unit variable costs of $5 per kit.Acme would like to earn a profit of $2 million.How many kits must Acme sell at a price of $15?

Correct Answer
verified

Variable cost refers to

Correct Answer
verified

In Figure 13-10 above,which is a break-even chart that depicts a graphic presentation of a break-even analysis for a picture frame store,the red-shaded wedge "ABC" represents the firm's

Correct Answer
verified

The horizontal axis of a demand curve graph represents __________.

Correct Answer
verified

StubHub's pricing formula is to

Correct Answer
verified

The money or other considerations (including other products and services) exchanged for the ownership or use of a product or service is referred to as __________.

Correct Answer
verified

A continuing,concise trade-off of incremental costs against incremental revenues is referred to as

Correct Answer
verified

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

Correct Answer
verified

Florida Power & Light,an electric power company,is the only source of electricity for consumers in most parts of the Florida panhandle.As a(n) __________,the company receives approval from the state utility commission for the rates it can charge.

Correct Answer
verified

Marginal cost is the change in total cost that results from

Correct Answer
verified

Exam 13: Building the Price Foundation

Explain the price equation in the context of a new car purchase.

Correct AnswerverifiedThe price equation is: Final price = Lis...View AnswerShow Answer

Correct AnswerverifiedShow Answer

For the sake of simplicity and by convention,price elasticity figures are shown as __________.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Step 1 of the price-setting process identifies pricing objectives and constraints.Describe the reasons these objectives may change and give examples of objectives a firm may set.

Correct AnswerverifiedPricing objectives involve specifying th...View AnswerShow Answer

Describe the types of competitive markets and give an example of each one.

Correct AnswerverifiedThere are four types of competitive mark...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

All of the following statements are true about an oligopolic competitive market situation EXCEPT:

Correct AnswerverifiedShow Answer

Which of the following would be an example of an objective in Step 1 of the price-setting process?

Correct AnswerverifiedShow Answer

Pure monopoly is the competitive market situation where

Correct AnswerverifiedShow Answer

Acme Shoe Company sells heel replacement kits for men's shoes.It has fixed costs of $6 million and unit variable costs of $5 per kit.Acme would like to earn a profit of $2 million.How many kits must Acme sell at a price of $15?

Correct AnswerverifiedShow Answer

Variable cost refers to

Correct AnswerverifiedShow Answer

In Figure 13-10 above,which is a break-even chart that depicts a graphic presentation of a break-even analysis for a picture frame store,the red-shaded wedge "ABC" represents the firm's

Correct AnswerverifiedShow Answer

The horizontal axis of a demand curve graph represents __________.

Correct AnswerverifiedShow Answer

StubHub's pricing formula is to

Correct AnswerverifiedShow Answer

The money or other considerations (including other products and services) exchanged for the ownership or use of a product or service is referred to as __________.

Correct AnswerverifiedShow Answer

A continuing,concise trade-off of incremental costs against incremental revenues is referred to as

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Florida Power & Light,an electric power company,is the only source of electricity for consumers in most parts of the Florida panhandle.As a(n) __________,the company receives approval from the state utility commission for the rates it can charge.

Correct AnswerverifiedShow Answer

Marginal cost is the change in total cost that results from

Correct AnswerverifiedShow Answer

Correct Answer
verified
The price equation is: Final price = Lis...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified
Pricing objectives involve specifying th...
View Answer

Correct Answer
verified
There are four types of competitive mark...
View Answer

Correct Answer
verified

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