Question 1

The value of an idea cannot be assessed by price.

Accepted Answer

A) True 
 B)False

Question 2

ACE Electronics introduces a new voice-activated personal computer that no longer requires a keyboard.ACE charges the high price of $11,000 per unit,thus generating large profits because it has a 20 percent market share.ACE's major problem in the future will most likely be

Accepted Answer

A)   survival.
B)   cash flow.
C)   competition.
D)   return on investment.
E)   profit.F) A) and E)
G) A) and D)

Question 3

Price should be defined in terms of money only.

Accepted Answer

A) True 
 B)False

Question 4

The point at which the costs of producing a product equal the revenue earned from selling the product is

Accepted Answer

A)   elasticity of demand.
B)   the breakeven point.
C)   variable costs.
D)   price elasticity.
E)   the sum of fixed and variable costs.F) A) and E)
G) C) and D)

Question 5

Which of the following is most likely to be a fixed cost?

Accepted Answer

A)   Component parts
B)   Raw materials
C)   Rent
D)   Electricity
E)   TransportationF) D) and E)
G) C) and E)

Question 6

When Cadillac buys headlights from Delco (both of which are divisions of General Motors) ,____ pricing occurs.

Accepted Answer

A)   base-point
B)   zone
C)   transfer
D)   uniform geographic
E)   matrixF) C) and D)
G) B) and D)

Question 7

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) B) and C)
G) A) and C)

Question 8

Ideally,pricing decisions have little relation to a firm's marketing objectives.

Accepted Answer

A) True 
 B)False

Question 9

Costs that vary directly with changes in the number of units produced or sold are called

Accepted Answer

A)   changeables.
B)   variable costs.
C)   direct costs.
D)   fixed costs.
E)   marginal costs.F) A) and D)
G) A) and C)

Question 10

Price is the value that is exchanged for products in a marketing transaction.

Accepted Answer

A) True 
 B)False

Question 11

A customer looking for the lowest price on a mattress without concern for the quality of the mattress or the status gained by buying and using a certain brand is a price-conscious customer.

Accepted Answer

A) True 
 B)False

Question 12

Marginal revenue is the change in total revenue that occurs when a firm sells an additional unit of product.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is not a method used to determine transfer prices?

Accepted Answer

A)   Discounted standard cost
B)   Actual full cost
C)   Standard full cost
D)   Cost plus investment
E)   Market-based costF) C) and D)
G) All of the above

Question 14

One advantage of nonprice competition is that

Accepted Answer

A)   a firm can react quickly to competitive efforts.
B)   market share becomes less important.
C)   a firm can build customer loyalty.
D)   marketing efforts are completely eliminated.
E)   pricing is no longer a factor.F) A) and B)
G) C) and E)

Question 15

What are the components of total cost? Give specific examples.

Accepted Answer

The components of total cost include bot...

Question 16

The type of prices most likely to appear in advertising is

Accepted Answer

A)   prestige.
B)   future.
C)   bargain.
D)   internal reference.
E)   cost-plus.F) A) and B)
G) A) and C)

Question 17

If Pacific Power and Light increased its rates 10 percent and experienced only a 2 percent reduction in the demand for power,the demand would be

Accepted Answer

A)   elastic.
B)   prestige.
C)   common.
D)   horizontal.
E)   inelastic.F) C) and D)
G) A) and E)

Question 18

The more experience the customer has with a product,the more he or she relies on external reference prices.

Accepted Answer

A) True 
 B)False

Question 19

The major disadvantage of using price competition is that it takes a long time to implement the changes in price.

Accepted Answer

A) True 
 B)False

Question 20

The tuition and fees each student paid for this semester of college are both terms for

Accepted Answer

A)   expenses.
B)   charges.
C)   bills.
D)   price.
E)   exchange valuations.F) All of the above
G) C) and E)

Exam 19: Strategic Pricing Management

Which of the following is not a method used to determine transfer prices?

Correct AnswerverifiedShow Answer

Marginal revenue is the change in total revenue that occurs when a firm sells an additional unit of product.

Correct AnswerverifiedShow Answer

The more experience the customer has with a product,the more he or she relies on external reference prices.

Correct AnswerverifiedShow Answer

ACE Electronics introduces a new voice-activated personal computer that no longer requires a keyboard.ACE charges the high price of $11,000 per unit,thus generating large profits because it has a 20 percent market share.ACE's major problem in the future will most likely be

Correct AnswerverifiedShow Answer

Costs that vary directly with changes in the number of units produced or sold are called

Correct AnswerverifiedShow Answer

When Cadillac buys headlights from Delco (both of which are divisions of General Motors) ,____ pricing occurs.

Correct AnswerverifiedShow Answer

Price is the value that is exchanged for products in a marketing transaction.

Correct AnswerverifiedShow Answer

The value of an idea cannot be assessed by price.

Correct AnswerverifiedShow Answer

Price should be defined in terms of money only.

Correct AnswerverifiedShow Answer

What are the components of total cost? Give specific examples.

Correct AnswerAnswered by ExamLex AIThe components of total cost include bot...View AnswerShow Answer

Which of the following is most likely to be a fixed cost?

Correct AnswerverifiedShow Answer

Ideally,pricing decisions have little relation to a firm's marketing objectives.

Correct AnswerverifiedShow Answer

The tuition and fees each student paid for this semester of college are both terms for

Correct AnswerverifiedShow Answer

If Pacific Power and Light increased its rates 10 percent and experienced only a 2 percent reduction in the demand for power,the demand would be

Correct AnswerverifiedShow Answer

A customer looking for the lowest price on a mattress without concern for the quality of the mattress or the status gained by buying and using a certain brand is a price-conscious customer.

Correct AnswerverifiedShow Answer

The type of prices most likely to appear in advertising is

Correct AnswerverifiedShow Answer

The major disadvantage of using price competition is that it takes a long time to implement the changes in price.

Correct AnswerverifiedShow Answer

The point at which the costs of producing a product equal the revenue earned from selling the product is

Correct AnswerverifiedShow Answer

One advantage of nonprice competition is that

Correct AnswerverifiedShow 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

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The components of total cost include bot...
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