Chapter 9 - Exam with correct answers PDF

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Exam with correct answers...

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Chapter 9 Which of the following is true about production cost as a pricing constraint? Select one: a. In the short run, a firm's price must cover all the costs of producing a product. b. Covering the firm's costs doesn't affect pricing the product at all. c. In the long run, a firm's costs set a floor under its price.

d. In the long run, a firm's costs set a ceiling over its price. Feedback In the long run, a firm's price must cover all the costs of producing and marketing a product. If the price doesn't cover these costs, the firm will fail; so in the long run, a firm's costs set a floor under its price. The correct answer is: In the long run, a firm's costs set a floor under its price. Question 2 Correct Mark 1.00 out of 1.00

14096485: A manufacturer using _____ is setting a high price so that statusconscious ...

Category: Chapter 9

Question text A manufacturer using _____ is setting a high price so that status-conscious consumers will be attracted to the product and buy it. Select one: a. skimming pricing b. prestige pricing

c. price lining d. odd-even pricing Feedback Prestige pricing involves setting a high price so that quality- or status-conscious consumers are attracted to the product and buy it. The correct answer is: prestige pricing Question 3 Correct Mark 1.00 out of 1.00

14096506: Target profit pricing is:

Category: Chapter 9

Question text Target profit pricing is: Select one: a. adjusting the price of a product so that it is "in line" with that of its largest competitor. b. setting the price of a line of products at a number of different price points. c. adding a fixed percentage to the cost of all items in a specific product class. d. setting an annual goal of a specific dollar amount of profit.

Feedback When a firm sets an annual target of a specific dollar amount of profit, this is called target profit pricing. The correct answer is: setting an annual goal of a specific dollar amount of profit. Question 4 Correct Mark 1.00 out of 1.00

14096487: Odd-even pricing is:

Category: Chapter 9

Question text Odd-even pricing is: Select one: a. setting prices one way for product lines and another way for individual brands. b. setting prices of luxury items at even price points and setting the price of necessities at odd price points. c. setting prices a few dollars or cents under an even number.

d. a method of pricing where price often falls following the reduction of costs associated with the firm's production experience. Feedback Odd-even pricing involves setting prices a few dollars or cents under an even number. The correct answer is: setting prices a few dollars or cents under an even number. Question 5 Correct Mark 1.00 out of 1.00

14096555: _____ is the practice of charging a very low price for a product with the ... Question text

Category: Chapter 9

_____ is the practice of charging a very low price for a product with the intent of driving competitors out of business. Select one: a. Price fixing b. Price discrimination c. Predatory pricing

d. Deceptive pricing Feedback Charging a very low price for a product with the intent of undercutting competitors and possibly driving them out of the market is called predatory pricing. The correct answer is: Predatory pricing Question 6 Correct Mark 1.00 out of 1.00

14096526: When a cereal manufacturer divides the sales revenue in a single year ...

Category: Chapter 9

Question text When a cereal manufacturer divides the sales revenue in a single year obtained by all its breakfast cereal brands by the breakfast cereal sales of all its competitors plus its own for that same year, it is calculating its _____. Select one: a. unit volume b. long-run profit c. current profit d. market share

Feedback Market share is the ratio of a firm's sales revenues or unit sales to those of the industry (competitors plus the firm itself). The correct answer is: market share Question 7 Correct Mark 1.00 out of 1.00

14096523: Which of the following statements about pricing objectives is true?

Category: Chapter 9

Question text Which of the following statements about pricing objectives is true? Select one: a. Market share and unit volume are synonymous. b. Unit volume is not a type of pricing objective because it is a production strategy. c. Firms that are interested in strategic planning set their objectives to maximize current profit. d. Profit objectives are frequently measured in terms of return on investments.

Feedback Profit objectives are often measured in terms of return on investment (ROI). These objectives have different implications for pricing strategy. The correct answer is: Profit objectives are frequently measured in terms of return on investments. Question 8 Correct Mark 1.00 out of 1.00

14096411: Profit equation is the ratio of perceived benefits to price.

Category: Chapter 9

Question text Profit equation is the ratio of perceived benefits to price. Select one: True False

Feedback Value is the ratio of perceived benefits to price. The correct answer is 'False'. Question 9 Correct Mark 1.00 out of 1.00

14096466: A high initial price used by companies to help recover research and ...

Category: Chapter 9

Question text A high initial price used by companies to help recover research and development costs is called a _____ strategy. Select one:

a. penetration pricing b. yield management pricing c. price skimming

d. prestige pricing Feedback A high initial price is called a price skimming strategy and is used by companies to help recover research and development costs. The correct answer is: price skimming Question 10 Correct Mark 1.00 out of 1.00

14096478: Setting the highest initial price that customers really desiring the product ...

Category: Chapter 9

Question text Setting the highest initial price that customers really desiring the product are willing to pay is _____. Select one: a. skimming pricing

b. penetration pricing c. price lining d. odd-even pricing Feedback A firm introducing a new product can use skimming pricing, setting the highest initial price that those customers really desiring the product are willing to pay. The correct answer is: skimming pricing Question 11 Incorrect Mark 0.00 out of 1.00

14096601: All of the major wireless providers in Canada (Bell, Telus, Rogers, Shaw, ...

Category: Chapter 9

Question text All of the major wireless providers in Canada (Bell, Telus, Rogers, Shaw, MTS, and Bell Aliant) decide that beginning next year all smartphone data plans will be $75 per GB, even though their delivery costs are far less. This activity is known as:

Select one: a. price discrimination. b. price fixing. c. predatory pricing.

d. tying arrangements. Feedback A conspiracy among firms to set prices for a product is termed price fixing. The correct answer is: price fixing. Question 12 Correct Mark 1.00 out of 1.00

14096561: After purchasing a bushel of ‘C' grade apples for $10, which were Category: Chapter on sale, ... 9 Question text After purchasing a bushel of ‘C' grade apples for $10, which were on sale, you get home and realize that they are of excellent quality, and should have been graded ‘B+' apples instead. You feel you received great benefits in comparison to the price you paid. This ratio is called: Select one: a. the price-quality relationship. b. prestige pricing. c. value-added pricing. d. value.

Feedback value is defined as the ratio of perceived benefits to price. The correct answer is: value. Question 13 Correct Mark 1.00 out of 1.00

14096549: Price discrimination is: Question text Price discrimination is: Select one:

Category: Chapter 9

a. an arrangement a manufacturer makes with a reseller to handle only its products and not those of a competitor. b. the practice of charging a very low price for a product with the intent of driving competitors out of business. c. the practice of charging different prices to different buyers for goods of like grade and quality.

d. a conspiracy among firms to set prices for a product or service. Feedback If different prices are charged to different customers for the same or very similar goods and the same terms, price discrimination has occurred. The correct answer is: the practice of charging different prices to different buyers for goods of like grade and quality. Question 14 Correct Mark 1.00 out of 1.00

14096482: Marthey and Lawrey's Inc. is a manufacturer of scopes for rifles. To appeal ...

Category: Chapter 9

Question text Marthey and Lawrey's Inc. is a manufacturer of scopes for rifles. To appeal to a larger market, the company has introduced a new lower-priced scope with the same quality and performance as its other previous products. Which pricing strategy is Marthey and Lawrey's Inc. using? Select one: a. skimming pricing b. penetration pricing

c. price lining d. odd-even pricing Feedback Marthey and Lawrey's Inc. is using penetration pricing. Penetration pricing is setting a low initial price on a new product to appeal immediately to the mass market. The correct answer is: penetration pricing Question 15 Correct Mark 1.00 out of 1.00

14096489: Target pricing is the result of a manufacturer _____ in a product to achieve ...

Category: Chapter 9

Question text Target pricing is the result of a manufacturer _____ in a product to achieve the target price. Select one: a. setting the highest costs possible b. deliberately adjusting the cost and quality of the component parts

c. researching what markups wholesalers will accept d. studying competitive prices and making fixed-cost adjustments Feedback Target pricing results in the manufacturer deliberately adjusting the composition and features of a product to achieve the target price to consumers. The correct answer is: deliberately adjusting the cost and quality of the component parts

Attempt 2 Which of the following is NOT one of the six major pricing objectives discussed in the text? Select one: a. profit b. unit volume c. break-even

d. survival Feedback The six major pricing objectives are: profit, sales, market share, unit volume, survival, and social responsibility. The correct answer is: break-even Question 2 Correct Mark 1.00 out of 1.00

14096566: Pricing constraints are: Question text Pricing constraints are: Select one: a. barriers that must be overcome in order to set pricing objectives. b. competitive pricing advantages one firm has over another.

Category: Chapter 9

c. different pricing strategies for each of the firm's products. d. factors that limit the latitude of prices a firm may set.

Feedback Factors that limit the latitude of prices a firm may set are called pricing constraints. The correct answer is: factors that limit the latitude of prices a firm may set. Question 3 Correct Mark 1.00 out of 1.00

14096494: A computer retailer shrink-wraps Microsoft Works to its privatelabelled ...

Category: Chapter 9

Question text A computer retailer shrink-wraps Microsoft Works to its private-labelled Pentium IV computer and sells the microcomputer and software for $2,500. This pricing scenario might best be described as _____. Select one: a. price lining b. loss-leader pricing c. bundle pricing

d. prestige pricing Feedback The computer retailer is using bundle pricing. A frequently used demand-oriented pricing practice is bundle pricing, which is the marketing of two or more products in a single "package" price. The correct answer is: bundle pricing Question 4 Correct Mark 1.00 out of 1.00

14096478: Setting the highest initial price that customers really desiring the product ...

Category: Chapter 9

Question text Setting the highest initial price that customers really desiring the product are willing to pay is _____. Select one: a. skimming pricing

b. penetration pricing c. price lining d. odd-even pricing Feedback A firm introducing a new product can use skimming pricing, setting the highest initial price that those customers really desiring the product are willing to pay. The correct answer is: skimming pricing Question 5 Correct Mark 1.00 out of 1.00

14096601: All of the major wireless providers in Canada (Bell, Telus, Rogers, Shaw, ...

Category: Chapter 9

Question text All of the major wireless providers in Canada (Bell, Telus, Rogers, Shaw, MTS, and Bell Aliant) decide that beginning next year all smartphone data plans will be $75 per GB, even though their delivery costs are far less. This activity is known as: Select one: a. price discrimination. b. price fixing.

c. predatory pricing. d. tying arrangements. Feedback A conspiracy among firms to set prices for a product is termed price fixing. The correct answer is: price fixing. Question 6 Correct Mark 1.00 out of 1.00

14096572: If the CEO of the Clorox Company were to say, "We want to control 60 percent ...

Category: Chapter 9

Question text If the CEO of the Clorox Company were to say, "We want to control 60 percent of the bleach market within the next five years," he would have set a _____ pricing objective. Select one: a. profit

b. sales c. unit volume d. market share

Feedback The CEO has set a numerical target for the percentage of the total bleach market, including his own sales, which is one definition of market share. The correct answer is: market share Question 7 Correct Mark 1.00 out of 1.00

14096529: Which term describes the factors in the marketplace that limit the Category: Chapter range of ... 9 Question text Which term describes the factors in the marketplace that limit the range of price a firm may set, such as newness of the product, demand for the product class, and competitors' prices? Select one: a. grey market conditions b. pricing constraints

c. organizational costs d. profit maximization objectives Feedback Pricing constraints are factors that limit the range of price a firm may set, such as newness of the product; demand for the product class, product, and brand; cost of producing and marketing the product; competitors' prices; and legal and ethical considerations. The correct answer is: pricing constraints Question 8 Correct Mark 1.00 out of 1.00

14096492: Julia owns a boutique store in which she sells a variety of home décor ...

Category: Chapter 9

Question text Julia owns a boutique store in which she sells a variety of home décor products. She works backward through markups given to wholesalers and to herself to determine what price she can charge for the products. Which of the following approaches to pricing is she using here?

Select one: a. yield management pricing b. experience curve pricing c. bundle pricing d. target pricing

Feedback Julia is using the target pricing approach. Target pricing results because the manufacturer deliberately adjusts the composition and features of a product to achieve the target price to consumers. Target pricing is demand-based and focused on what consumers are willing to pay. The correct answer is: target pricing Question 9 Correct Mark 1.00 out of 1.00

14096470: H&G Co. Ltd. has used a high initial price for its newly launched Category: Chapter cellphones.... 9 Question text H&G Co. Ltd. has used a high initial price for its newly launched cellphones. The company hopes to recover its research and development costs with this pricing. This is an example of a _____. Select one: a. price lining strategy b. price skimming strategy

c. yield management pricing strategy d. prestige pricing strategy Feedback A high initial price is called a price skimming strategy and is used by companies to help recover research and development costs. The correct answer is: price skimming strategy Question 10 Incorrect Mark 0.00 out of 1.00

14096500: Standard markup: Question text Standard markup:

Category: Chapter 9

Select one: a. adjusts the price of a product so that it is "in line" with that of its largest competitor. b. sets the price of a line of products at a number of different price points. c. is the difference between selling price and cost, divided by cost. d. sets prices to achieve a profit that is a specified percentage of the sales volume.

Feedback Manufacturers commonly express markup as a percentage of cost, which is the difference between selling price and cost, divided by cost. This is also referred to as standard markup. The correct answer is: is the difference between selling price and cost, divided by cost. Question 11 Correct Mark 1.00 out of 1.00

14096520: Using _____ pricing, many retailers deliberately sell products below their ...

Category: Chapter 9

Question text Using _____ pricing, many retailers deliberately sell products below their normal prices (and sometimes below cost) to attract attention and induce additional store traffic. Select one: a. customary b. above-market c. loss-leader

d. prestige Feedback Retailers sometimes deliberately sell commonly used products, such as paper towels, soft drinks, and facial tissues, at very low prices to attract consumers who, the retailer hopes, will also buy other, regularly priced merchandise. The correct answer is: loss-leader Question 12 Correct Mark 1.00 out of 1.00

14096541: Which of the following is true about production cost as a pricing constraint? Question text Which of the following is true about production cost as a pricing constraint?

Category: Chapter 9

Select one: a. In the short run, a firm's price must cover all the costs of producing a product. b. Covering the firm's costs doesn't affect pricing the product at all. c. In the long run, a firm's costs set a floor under its price.

d. In the long run, a firm's costs set a ceiling over its price. Feedback In the long run, a firm's price must cover all the costs of producing and marketing a product. If the price doesn't cover these costs, the firm will fail; so in the long run, a firm's costs set a floor under its price. The correct answer is: In the long run, a firm's costs set a floor under its price. Question 13 Correct Mark 1.00 out of 1.00

14096509: Target return-on-sales pricing is:

Category: Chapter 9

Question text Target return-on-sales pricing is: Select one: a. adjusting the price of a product so that it is "in line" with that of its largest competitor. b. setting the price of a line of products at a number of different price points. c. adding a fixed percentage to the cost of all items in a specific product class. d. setting prices to achieve a profit that is a specified percentage of the sales revenue.

Feedback Firms such as supermarkets often use target return-on-sales pricing to set prices that will give them a profit that is a specified percentage—say, 1 percent—of the sales volume. The correct answer is: setting prices to achieve a profit that is a specified percentage of the sales revenue. Question 14 Correct Mark 1.00 out of 1.00

14096485: A manufacturer using _____ is setting a high price so that statusconscious ...

Category: Chapter 9

Question text A manufacturer using _____ is setting a high price so that status-conscious consumers will be attracted to the product and buy it.

Select one: a. skimming pricing b. prestige pricing

c. price lining d. odd-even pricing Feedback Prestige pricing involves setting a high price so that quality- or status-conscious consu...