Question 1

Identify and describe the major factors that affect pricing decisions.

Accepted Answer

Establishing prices involves selecting a...

Question 2

Transfer pricing involves the sale of a product to another unit within the same organization.

Accepted Answer

A) True 
 B)False

Question 3

Profits for a firm are computed as follows: Profits = Total Revenue - Fixed Costs.

Accepted Answer

A) True 
 B)False

Question 4

A product under nonprice competition would most likely not succeed in the market if

Accepted Answer

A)  a new advertising campaign is established for it.
B)  it is easy to duplicate.
C)  it is packaged differently from similar products.
D)  it is priced near the competitors' price.
E)  its quality has been upgraded.F) None of the above
G) All of the above

Question 5

When a customer is considering the purchase of a product in a less-familiar product category, that individual is likely to rely more heavily on

Accepted Answer

A)  internal reference prices.
B)  symbol prices.
C)  high value products.
D)  discounted reference prices.
E)  external reference prices.F) A) and E)
G) A) and B)

Question 6

With prestige products, a firm will always be able to sell more at a higher price.

Accepted Answer

A) True 
 B)False

Question 7

​Marginal analysis involves examining

Accepted Answer

A)  what happens to a firm's costs and revenues when production is changed by one unit.
B)  what happens to a firm's revenues when one more product is sold.
C)  what happens to a firm's costs when one more unit is produced.
D)  the difference between marginal revenue and total revenue.
E)  the difference between marginal cost and total cost.F) A) and E)
G) C) and D)

Question 8

When marginal cost is equal to marginal revenue, the firm should

Accepted Answer

A)  produce more to increase profits.
B)  produce less to decrease total costs.
C)  stop producing additional units to maximize profits.
D)  provide discounts to encourage purchases.
E)  intensify distribution to increase sales.F) C) and E)
G) B) and E)

Question 9

The legality of uniform geographic pricing has been challenged, and so its use has been abandoned.

Accepted Answer

A) True 
 B)False

Question 10

If a retailer orders a quantity of merchandise to be delivered to his store in Phoenix and is quoted a price that does not include shipping charges, the retailer is paying a(n)  ____ price.

Accepted Answer

A)  F.O.B. destination
B)  F.O.B. factory
C)  transfer
D)  postage-stamp
E)  base-pointF) D) and E)
G) A) and B)

Question 11

Logan is reading the online report of the tuition and fees he owes for this semester of college. Since he has signed up for online banking, he pays the amount immediately. The amount Logan just paid is considered to be

Accepted Answer

A)  his expenses.
B)  his charges.
C)  his bill.
D)  the price.
E)  the exchange valuations.F) A) and B)
G) C) and E)

Question 12

Which of the following products is most likely to involve personal selling?

Accepted Answer

A)  Blenders at a department store
B)  Riding lawn mowers
C)  Kindle Fire
D)  Picture frames at a hobby supply store
E)  Footballs at a sporting goods storeF) A) and C)
G) B) and C)

Question 13

Compare and contrast price and nonprice competition. Give examples of firms that compete on a price basis and on a nonprice basis.

Accepted Answer

When engaging in price competition, a ma...

Question 14

A measure of sensitivity of demand in relation to changes in price is

Accepted Answer

A)  a demand curve.
B)  a prestige graph.
C)  marginal analysis.
D)  price elasticity of demand.
E)  quantity elasticity.F) None of the above
G) B) and E)

Question 15

Safe Auto advertises its automobile insurance as "minimum coverage for minimum budgets." Safe Auto is engaging in

Accepted Answer

A)  non-price competition.
B)  demand-based pricing.
C)  competitive pricing.
D)  price differentiation.
E)  price competition.F) C) and D)
G) None of the above

Question 16

Price is a crucial marketing mix component.

Accepted Answer

A) True 
 B)False

Question 17

Roberts Electronics calculates that if it produces 15 radar detectors, its costs are $1,500, and if it produces 16 radar detectors, its costs are $1,590. In this instance, $90 is the firm's ____ cost.

Accepted Answer

A)  average
B)  fixed
C)  variable
D)  marginal
E)  average variableF) A) and E)
G) C) and D)

Question 18

A firm can survive in the long run only if its products are sold below cost.

Accepted Answer

A) True 
 B)False

Question 19

If Wilson Sporting Goods faces a standard demand curve that exists for most products, as it raises the price of its tennis rackets, the

Accepted Answer

A)  quantity demanded goes down.
B)  demand remains constant.
C)  quantity demanded increases.
D)  demand increases.
E)  breakeven increases.F) A) and E)
G) C) and E)

Question 20

Provisions of the Robinson-Patman Act, as well as those of the ____, limit the use of price differentials.

Accepted Answer

A)  Simpson-Marshall Act
B)  Federal Trade Commission Act
C)  Wheeler-Lea Act
D)  Clayton Act
E)  Sherman Antitrust ActF) A) and D)
G) A) and E)

Exam 19: Pricing Concepts

Roberts Electronics calculates that if it produces 15 radar detectors, its costs are $1,500, and if it produces 16 radar detectors, its costs are $1,590. In this instance, $90 is the firm's ____ cost.

Correct AnswerverifiedShow Answer

Safe Auto advertises its automobile insurance as "minimum coverage for minimum budgets." Safe Auto is engaging in

Correct AnswerverifiedShow Answer

When marginal cost is equal to marginal revenue, the firm should

Correct AnswerverifiedShow Answer

Provisions of the Robinson-Patman Act, as well as those of the ____, limit the use of price differentials.

Correct AnswerverifiedShow Answer

A measure of sensitivity of demand in relation to changes in price is

Correct AnswerverifiedShow Answer

​Marginal analysis involves examining

Correct AnswerverifiedShow Answer

Price is a crucial marketing mix component.

Correct AnswerverifiedShow Answer

The legality of uniform geographic pricing has been challenged, and so its use has been abandoned.

Correct AnswerverifiedShow Answer

A firm can survive in the long run only if its products are sold below cost.

Correct AnswerverifiedShow Answer

Transfer pricing involves the sale of a product to another unit within the same organization.

Correct AnswerverifiedShow Answer

Profits for a firm are computed as follows: Profits = Total Revenue - Fixed Costs.

Correct AnswerverifiedShow Answer

If a retailer orders a quantity of merchandise to be delivered to his store in Phoenix and is quoted a price that does not include shipping charges, the retailer is paying a(n) ____ price.

Correct AnswerverifiedShow Answer

Which of the following products is most likely to involve personal selling?

Correct AnswerverifiedShow Answer

When a customer is considering the purchase of a product in a less-familiar product category, that individual is likely to rely more heavily on

Correct AnswerverifiedShow Answer

With prestige products, a firm will always be able to sell more at a higher price.

Correct AnswerverifiedShow Answer

A product under nonprice competition would most likely not succeed in the market if

Correct AnswerverifiedShow Answer

Compare and contrast price and nonprice competition. Give examples of firms that compete on a price basis and on a nonprice basis.

Correct AnswerverifiedWhen engaging in price competition, a ma...View AnswerShow Answer

If Wilson Sporting Goods faces a standard demand curve that exists for most products, as it raises the price of its tennis rackets, the

Correct AnswerverifiedShow Answer

Identify and describe the major factors that affect pricing decisions.

Correct AnswerverifiedEstablishing prices involves selecting a...View AnswerShow Answer

Logan is reading the online report of the tuition and fees he owes for this semester of college. Since he has signed up for online banking, he pays the amount immediately. The amount Logan just paid is considered to be

Correct AnswerverifiedShow Answer

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Marginal analysis involves examining

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When engaging in price competition, a ma...
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Establishing prices involves selecting a...
View Answer

Correct Answer
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