Question 1

A penetration pricing policy is MOST LIKELY to be effective when

Accepted Answer

A)  lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost.
B)  many segments of the market are price sensitive.
C)  the high initial price will not attract competitors.
D)  customers interpret the high price as signifying high quality.
E)  enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable.F) A) and B)
G) A) and D)

Question 2

Setting prices a few dollars or cents under an even number is referred to as __________.

Accepted Answer

A)  odd-even pricing
B)  prestige pricing
C)  price lining
D)  above-,at-,or below-market pricing
E)  every day fair pricingF) C) and E)
G) A) and E)

Question 3

Target profit pricing refers to

Accepted Answer

A)  adjusting the price of a product so it is "in line" with that of its largest competitor.
B)  setting an annual target of a specific dollar volume of profit.
C)  setting the price of a line of products at a number of different price points.
D)  adding a fixed percentage to the cost of all items in a specific product class.
E)  setting prices to achieve a profit that is a specified percentage of production costs.F) A) and B)
G) B) and C)

Question 4

Resale price maintenance was declared illegal in 1975 under the

Accepted Answer

A)  Sherman Act.
B)  Consumer Goods Pricing Act.
C)  Robinson-Patman Act.
D)  Federal Trade Commission Act.
E)  Clayton Act.F) D) and E)
G) B) and C)

Question 5

All of the following are demand-oriented approaches to selecting an approximate price level EXCEPT:

Accepted Answer

A)  odd-even.
B)  yield management.
C)  customary.
D)  bundle.
E)  prestige.F) B) and D)
G) A) and E)

Question 6

An ad campaign by Suave shampoo asked television viewers to identify the heads of hair of women who used Suave shampoo and conditioner and those that used the much more expensive salon hair-care products.The idea of the ad was that no one could tell which woman used the much cheaper Suave brand.By making price its selling point,Suave is MOST LIKELY using __________.

Accepted Answer

A)  customary pricing
B)  loss-leader pricing
C)  prestige pricing
D)  skimming pricing
E)  below-market pricingF) A) and B)
G) A) and C)

Question 7

Consider Figure 14-9 above."C" represents which of the following legislative acts?

Accepted Answer

A)  The Robinson-Patman Act
B)  The Clayton Act
C)  The Sherman Act
D)  The Federal Trade Commission Act
E)  The Consumer Goods Pricing ActF) A) and B)
G) D) and E)

Question 8

A hardware store advertises a ⅜" Black and Decker Power Drill for $29.95.You enter the store intending to purchase the drill.The salesperson informs you that they are all sold out.She tells you that the "sale" drills were factory seconds and that if you are going to be doing any kind of serious woodworking,you should buy the Model 3309,which sells for $49.99.This scenario has elements of which type of illegal pricing practice?

Accepted Answer

A)  predatory pricing
B)  price discrimination
C)  price fixing
D)  bait and switch
E)  conditional bargainsF) C) and D)
G) A) and B)

Question 9

According to Figure 14-1 above,"D" represents which step in the price-setting process?

Accepted Answer

A)  estimate demand and revenue
B)  select an approximate price level
C)  scan competitors for prices of similar products or services.
D)  determine cost,volume,and profit relationships
E)  establish the price rangeF) B) and D)
G) B) and C)

Question 10

A construction company was offered a 3 percent reduction in price off all invoices from a lumber yard for paying them within 10 days of issue.The lumber yard was offering a

Accepted Answer

A)  trade discount.
B)  cash discount.
C)  promotional allowance.
D)  rebate.
E)  flexible price.F) A) and B)
G) B) and C)

Question 11

Consider Figure 14-9 above."A" represents which of the following legislative acts?

Accepted Answer

A)  The Robinson-Patman Act
B)  The Clayton Act
C)  The Sherman Act
D)  The Federal Trade Commission Act
E)  The Consumer Goods Pricing ActF) A) and D)
G) C) and E)

Question 12

Figure 14-2 above represents the four approaches to selecting an appropriate price level."A" represents which approach?

Accepted Answer

A)  cost-oriented approach
B)  profit-oriented approach
C)  competition-oriented approach
D)  demand-oriented approach
E)  results-oriented approachF) A) and B)
G) None of the above

Question 13

A manufacturer of a digital video recorder (DVR) is thinking of using a skimming pricing strategy for its new product.Which of the following conditions would argue AGAINST using a skimming pricing strategy for the DVR?

Accepted Answer

A)  large potential market,even at a high price
B)  technological problems still exist for competitors
C)  increasing volume reduces production costs substantially
D)  consumers perceive a price-quality relationship
E)  consumers are innovatorsF) C) and D)
G) D) and E)

Question 14

The two general methods for quoting prices related to transportation costs are uniformed delivered pricing and __________.

Accepted Answer

A)  regional pricing
B)  flexible pricing
C)  mode of transportation pricing
D)  FOB origin pricing
E)  FOB destination pricingF) B) and C)
G) A) and E)

Question 15

What is the difference between a fixed-price policy and a dynamic pricing policy?

Accepted Answer

A fixed-price policy,also called a one-p...

Question 16

Two or more competitors explicitly or implicitly setting prices is referred to as __________.

Accepted Answer

A)  competitive collusion
B)  vertical price fixing
C)  horizontal price fixing
D)  lateral price fixing
E)  price cooperationF) C) and D)
G) C) and E)

Question 17

Five pricing practices are closely scrutinized because of potential unethical or illegal actions.They include: (1) price fixing; (2) price discrimination; (3) deceptive pricing; (4) geographical pricing;and (5) __________.

Accepted Answer

A)  predatory pricing
B)  price discounting
C)  lateral price fixing
D)  regional rollbacks
E)  delayed payment penaltiesF) None of the above
G) A) and B)

Question 18

Manufacturers or even wholesalers make geographical adjustments to list or quoted prices to reflect

Accepted Answer

A)  warehouse inventory carrying and loading costs.
B)  the cost of transportation of the products from seller to buyer.
C)  changes in price due to tariffs the Federal Trade Commission imposes on the transport of goods from the U.S.
D)  changes in price due to fuel excise taxes on inefficient diesel trucks.
E)  the need some firms have of recouping the costs of developing different versions of their products for different global markets.F) A) and B)
G) A) and C)

Question 19

A retailer purchased a gross (144) of silk shells each costing exactly $17 apiece.Although the only difference between the shells was color,when they were put on the floor,the primary colors were marked $25,the pastel colors were marked $28 dollars,and the black and white shells were marked $30.These prices were set most likely because

Accepted Answer

A)  retailers using a price lining strategy will occasionally mark up items based on color,style,and expected consumer demand.
B)  fewer people buy black and white shells,so the retailer has to charge a higher price to break even.
C)  the retailer is using prestige pricing;black and white shells are more elegant.
D)  the primary colors were priced using a penetration strategy,the pastels were priced using a skimming strategy,and the black and white shells were priced using prestige pricing.
E)  price lining is essentially the same as above-,at-,or below market pricing.F) A) and D)
G) C) and D)

Question 20

Determining cost,volume,and profit relationships would occur during __________ of the price-setting process.

Accepted Answer

A)  Step 2
B)  Step 3
C)  Step 4
D)  Step 5
E)  Step 6F) B) and D)
G) C) and D)

Exam 14: Arriving at the Final Price

Target profit pricing refers to

Correct Answer
verified

A construction company was offered a 3 percent reduction in price off all invoices from a lumber yard for paying them within 10 days of issue.The lumber yard was offering a

Correct Answer
verified

Resale price maintenance was declared illegal in 1975 under the

Correct Answer
verified

Five pricing practices are closely scrutinized because of potential unethical or illegal actions.They include: (1) price fixing; (2) price discrimination; (3) deceptive pricing; (4) geographical pricing;and (5) __________.

Correct Answer
verified

According to Figure 14-1 above,"D" represents which step in the price-setting process?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

A manufacturer of a digital video recorder (DVR) is thinking of using a skimming pricing strategy for its new product.Which of the following conditions would argue AGAINST using a skimming pricing strategy for the DVR?

Correct Answer
verified

Consider Figure 14-9 above."C" represents which of the following legislative acts?

Correct Answer
verified

The two general methods for quoting prices related to transportation costs are uniformed delivered pricing and __________.

Correct Answer
verified

Two or more competitors explicitly or implicitly setting prices is referred to as __________.

Correct Answer
verified

Determining cost,volume,and profit relationships would occur during __________ of the price-setting process.

Correct Answer
verified

Setting prices a few dollars or cents under an even number is referred to as __________.

Correct Answer
verified

Figure 14-2 above represents the four approaches to selecting an appropriate price level."A" represents which approach?

Correct Answer
verified

What is the difference between a fixed-price policy and a dynamic pricing policy?

Correct Answer
verified
A fixed-price policy,also called a one-p...
View Answer

All of the following are demand-oriented approaches to selecting an approximate price level EXCEPT:

Correct Answer
verified

A penetration pricing policy is MOST LIKELY to be effective when

Correct Answer
verified

Manufacturers or even wholesalers make geographical adjustments to list or quoted prices to reflect

Correct Answer
verified

Correct Answer
verified

Consider Figure 14-9 above."A" represents which of the following legislative acts?

Correct Answer
verified

Exam 14: Arriving at the Final Price

Target profit pricing refers to

Correct AnswerverifiedShow Answer

A construction company was offered a 3 percent reduction in price off all invoices from a lumber yard for paying them within 10 days of issue.The lumber yard was offering a

Correct AnswerverifiedShow Answer

Resale price maintenance was declared illegal in 1975 under the

Correct AnswerverifiedShow Answer

Five pricing practices are closely scrutinized because of potential unethical or illegal actions.They include: (1) price fixing; (2) price discrimination; (3) deceptive pricing; (4) geographical pricing;and (5) __________.

Correct AnswerverifiedShow Answer

According to Figure 14-1 above,"D" represents which step in the price-setting process?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A manufacturer of a digital video recorder (DVR) is thinking of using a skimming pricing strategy for its new product.Which of the following conditions would argue AGAINST using a skimming pricing strategy for the DVR?

Correct AnswerverifiedShow Answer

Consider Figure 14-9 above."C" represents which of the following legislative acts?

Correct AnswerverifiedShow Answer

The two general methods for quoting prices related to transportation costs are uniformed delivered pricing and __________.

Correct AnswerverifiedShow Answer

Two or more competitors explicitly or implicitly setting prices is referred to as __________.

Correct AnswerverifiedShow Answer

Determining cost,volume,and profit relationships would occur during __________ of the price-setting process.

Correct AnswerverifiedShow Answer

Setting prices a few dollars or cents under an even number is referred to as __________.

Correct AnswerverifiedShow Answer

Figure 14-2 above represents the four approaches to selecting an appropriate price level."A" represents which approach?

Correct AnswerverifiedShow Answer

What is the difference between a fixed-price policy and a dynamic pricing policy?

Correct AnswerverifiedA fixed-price policy,also called a one-p...View AnswerShow Answer

All of the following are demand-oriented approaches to selecting an approximate price level EXCEPT:

Correct AnswerverifiedShow Answer

A penetration pricing policy is MOST LIKELY to be effective when

Correct AnswerverifiedShow Answer

Manufacturers or even wholesalers make geographical adjustments to list or quoted prices to reflect

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Consider Figure 14-9 above."A" represents which of the following legislative acts?

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A fixed-price policy,also called a one-p...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified