Question 1

Which of the following illustrates a shift in the demand curve?

Accepted Answer

A)  When prices remain the same,there is a significant decrease in demand.
B)  As the price is raised,the quantity demanded increases,assuming all else stays the same.
C)  When prices remain the same,there is an increase or decrease in demand.
D)  As the price is lowered,the quantity demanded decreases,assuming all else stays the same.
E)  An internal matter has forced a price change of some type,but it does not impact demand.F) A) and C)
G) None of the above

Question 2

The ratio of __________ to price is referred to as value.

Accepted Answer

A)  prestige value
B)  perceived benefits
C)  costs
D)  perceived quality
E)  profitsF) A) and E)
G) A) and D)

Question 3

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 __________.

Accepted Answer

A)  decrease;stay the same
B)  increase;increase
C)  decrease;increase
D)  stay the same;increase
E)  stay the same;decreaseF) A) and B)
G) None of the above

Question 4

Which of the following statements is MOST ACCURATE?

Accepted Answer

A)  For some products,price influences the perception of overall quality,and ultimately value,to consumers.
B)  A consumer's view of a product's value is always tied to quality.
C)  A consumer's view of value is a function of his or her education and income.
D)  Price plays only a small part in a consumer's perceived value of a product or service.
E)  Price plays a large role in assessing value but a very minor role in assessing quality.F) B) and E)
G) All of the above

Question 5

The ratio of perceived benefits to price is referred to as

Accepted Answer

A)  the price-quality relationship.
B)  customer value pricing.
C)  value-added pricing.
D)  value analysis.
E)  value.F) A) and E)
G) C) and D)

Question 6

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

Accepted Answer

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

Question 7

The executive vice president of Washburn Guitars has set a sales target of 2,000 units for a new line of guitars.This type of objective is a(n) __________ pricing objective.

Accepted Answer

A)  profit
B)  target return
C)  unit volume
D)  market share
E)  survivalF) B) and C)
G) A) and E)

Question 8

Figure 13-2 above represents the six steps in setting price.Which letter represents the step where a firm would estimate dollar and unit sales revenues?

Accepted Answer

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

Question 9

You have been asked to calculate the break-even point for a new line of T-shirts.The selling price will be $25 per shirt.The labor cost is $5 per shirt.The administrative costs of operating the company are estimated to be $60,000 annually and the sales and marketing expenses are $20,000 a year.Additionally,the cost of materials will be $10 per shirt.What is the break-even quantity?

Accepted Answer

A)  2,000 shirts
B)  3,200 shirts
C)  5,334 shirts
D)  8,000 shirts
E)  16,000 shirtsF) A) and D)
G) B) and E)

Question 10

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.

Accepted Answer

A)  profit
B)  sales
C)  unit volume
D)  market share
E)  social responsibilityF) D) and E)
G) A) and B)

Question 11

At a price of $4.00 each,SHAPE magazine sells 1.25 million copies of its magazine targeted to young women seeking a healthier lifestyle.If the price per issue is increased to $4.50 each,only 1 million copies will be sold.Fixed costs are $1 million and unit variable costs are $0.50 per magazine.Calculate the average revenue for SHAPE magazine at the higher price.

Accepted Answer

A)  $0.50
B)  $1.25
C)  $4.00
D)  $4.50
E)  $8.50F) A) and E)
G) D) and E)

Question 12

Figure 13-5A above shows that when the quantity demanded for Red Baron frozen cheese pizzas moves from 2 to 3 million units along the demand curve D1,the profit

Accepted Answer

A)  increases from $6 to $8 per unit.
B)  decreases from $8 to $6 per unit.
C)  stays the same per unit.
D)  increases from $2 to $3 per unit.
E)  Figure 13-5A does not indicate what happens to profit when the quantity demanded changes.F) C) and E)
G) C) and D)

Question 13

Renfro's,Inc. ,is a company that sells 25 different relishes in 45 different states.Mrs.Renfro's chipotle corn salsa is so popular that the company cannot make enough to keep its resellers stocked.Its price of $4.50 for a jar seems just right to consumers who savor its hot and spicy taste.The popularity of hot and spicy food is an example of a __________ that Mrs.Renfro's has taken advantage of to make its product a success.

Accepted Answer

A)  barter factor
B)  demand factor
C)  supply factor
D)  consumer index
E)  macroeconomic environmental factorF) A) and E)
G) A) and C)

Question 14

Price elasticity of demand (E) is expressed as (∆ means change) :

Accepted Answer

A)  E = Percentage change in price (%∆ in P) ÷ Percentage change in quantity demanded (%∆ in Q) .
B)  E = Price (P) ÷ Quantity demanded (Q) .
C)  E = Percentage change in quantity demanded (%∆ in Q) ÷ Percentage change in price (%∆ in P) .
D)  E = Quantity demanded (Q) ÷ Price (P) .
E)  E = Quantity demanded (Q) × Price (P) .F) A) and D)
G) C) and D)

Question 15

For any downward-sloping,straight-line demand curve,the marginal revenue curve always

Accepted Answer

A)  is the additional money required to make one additional unit.
B)  falls at a rate twice as fast as the demand curve.
C)  falls at a rate half as fast as the demand curve.
D)  remains the same since there is a one-to-one relationship.
E)  reacts as the direct inverse of the original line.F) A) and E)
G) B) and E)

Question 16

Companies often pursue a market share objective when __________.

Accepted Answer

A)  industry sales are flat or declining
B)  profits are increasing
C)  industry sales are beginning to rise
D)  there is a sudden increase in production costs
E)  stockholders are seeking higher dividendsF) All of the above
G) B) and C)

Question 17

The break-even point (BEP) = [__________ ÷ (Unit price − Unit variable cost) ].

Accepted Answer

A)  Total cost
B)  Total expense
C)  Fixed cost
D)  Unit variable cost
E)  Total number of units produced or quantityF) C) and D)
G) A) and E)

Question 18

Barter refers to

Accepted Answer

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) All of the above

Question 19

While pricing objectives frequently reflect corporate goals,pricing constraints often relate to

Accepted Answer

A)  stockholder demands.
B)  political ideology.
C)  conditions existing in the marketplace.
D)  an organization's code of ethics.
E)  the financial realities within the organization itself.F) B) and D)
G) C) and D)

Question 20

The break-even point (BEP) = [Fixed cost ÷ (Unit price − __________) ].

Accepted Answer

A)  Total cost
B)  Total expense
C)  Marginal revenue
D)  Unit variable cost
E)  Total number of units produced or quantityF) C) and D)
G) All of the above

Exam 13: Building the Price Foundation

The executive vice president of Washburn Guitars has set a sales target of 2,000 units for a new line of guitars.This type of objective is a(n) __________ pricing objective.

Correct Answer
verified

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.

Correct Answer
verified

The break-even point (BEP) = [__________ ÷ (Unit price − Unit variable cost) ].

Correct Answer
verified

The break-even point (BEP) = [Fixed cost ÷ (Unit price − __________) ].

Correct Answer
verified

Price elasticity of demand (E) is expressed as (∆ means change) :

Correct Answer
verified

Figure 13-5A above shows that when the quantity demanded for Red Baron frozen cheese pizzas moves from 2 to 3 million units along the demand curve D₁,the profit

Correct Answer
verified

Which of the following illustrates a shift in the demand curve?

Correct Answer
verified

The ratio of perceived benefits to price is referred to as

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

Correct Answer
verified

Figure 13-2 above represents the six steps in setting price.Which letter represents the step where a firm would estimate dollar and unit sales revenues?

Correct Answer
verified

Correct Answer
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Which of the following statements is MOST ACCURATE?

Correct Answer
verified

The ratio of __________ to price is referred to as value.

Correct Answer
verified

Correct Answer
verified

For any downward-sloping,straight-line demand curve,the marginal revenue curve always

Correct Answer
verified

While pricing objectives frequently reflect corporate goals,pricing constraints often relate to

Correct Answer
verified

Companies often pursue a market share objective when __________.

Correct Answer
verified

Barter refers to

Correct Answer
verified

Exam 13: Building the Price Foundation

The executive vice president of Washburn Guitars has set a sales target of 2,000 units for a new line of guitars.This type of objective is a(n) __________ pricing objective.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

The break-even point (BEP) = [__________ ÷ (Unit price − Unit variable cost) ].

Correct AnswerverifiedShow Answer

The break-even point (BEP) = [Fixed cost ÷ (Unit price − __________) ].

Correct AnswerverifiedShow Answer

Price elasticity of demand (E) is expressed as (∆ means change) :

Correct AnswerverifiedShow Answer

Figure 13-5A above shows that when the quantity demanded for Red Baron frozen cheese pizzas moves from 2 to 3 million units along the demand curve D1,the profit

Correct AnswerverifiedShow Answer

Which of the following illustrates a shift in the demand curve?

Correct AnswerverifiedShow Answer

The ratio of perceived benefits to price is referred to as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 13-2 above represents the six steps in setting price.Which letter represents the step where a firm would estimate dollar and unit sales revenues?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements is MOST ACCURATE?

Correct AnswerverifiedShow Answer

The ratio of __________ to price is referred to as value.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

For any downward-sloping,straight-line demand curve,the marginal revenue curve always

Correct AnswerverifiedShow Answer

While pricing objectives frequently reflect corporate goals,pricing constraints often relate to

Correct AnswerverifiedShow Answer

Companies often pursue a market share objective when __________.

Correct AnswerverifiedShow Answer

Barter refers to

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Figure 13-5A above shows that when the quantity demanded for Red Baron frozen cheese pizzas moves from 2 to 3 million units along the demand curve D₁,the profit

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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