Question 1

If a product has a close substitute, its demand will likely be ________.

Accepted Answer

A)   inelastic
B)   elastic
C)   cross-elastic
D)   fixed
E)   break-evenF) C) and E)
G) A) and E)

Question 2

By using ________, a company deliberately sets a low price with the intention of driving its competition out of business.

Accepted Answer

A)   price-fixing
B)   price lining
C)   surge pricing
D)   predatory pricing
E)   loss leader pricingF) B) and C)
G) D) and E)

Question 3

To encourage customers to buy the $799 dining room suite, the furniture store set a much cheaper and shoddily made set next to the more expensive furniture, thereby using the contrast effect.

Accepted Answer

A) True 
 B)False

Question 4

In which type of pricing is the selling price based on an estimate of volume or quantity a firm can sell in different markets at different prices?

Accepted Answer

A)   value
B)   keystoning
C)   demand-based
D)   penetration
E)   peak loadF) B) and D)
G) A) and B)

Question 5

What are the advantages of digital currencies such as Bitcoin?

Accepted Answer

Digital currencies such as Bitcoin have ...

Question 6

________ is the assignment of value, or the amount a consumer must give to receive a product.

Accepted Answer

A)   Profit
B)   Exchange
C)   Price
D)   Demand
E)   YieldF) A) and D)
G) A) and E)

Question 7

How is the price elasticity of demand calculated?

Accepted Answer

A)   averaging previous demand levels with new demand levels
B)   dividing percentage change in quantity demanded by percentage change in price
C)   dividing the new quantity demanded by the percentage change in price times 100
D)   multiplying the percentage change in quantity demanded by the percentage change in price
E)   dividing the percentage change in price by the percentage change in quantity demandedF) C) and D)
G) B) and D)

Question 8

A retailer that uses the list price for products but runs frequent promotions that heavily discount some products is using which type of pricing strategy?

Accepted Answer

A)   price skimming
B)   trial pricing
C)   penetration pricing
D)   peak load pricing
E)   high/low pricingF) All of the above
G) B) and E)

Question 9

Price segmentation is the practice of charging different prices to different market segments for the same product.

Accepted Answer

A) True 
 B)False

Question 10

In a market with ________, there are many sellers, each offering a slightly different product. Firms can differentiate products and focus on nonprice competition.

Accepted Answer

A)   pure competition
B)   monopolistic competition
C)   oligopolistic competition
D)   vertical integration
E)   inflationF) B) and D)
G) A) and E)

Question 11

________ are the per-unit costs of production that will fluctuate depending on how many units or individual products a firm produces.

Accepted Answer

A)   Fixed costs
B)   Variable costs
C)   Average fixed costs
D)   Marginal costs
E)   Everyday costsF) B) and E)
G) A) and E)

Question 12

The value of something we give up in order to obtain something else is referred to as a(n)  ________.

Accepted Answer

A)   transformation cost
B)   opportunity cost
C)   exchange
D)   variable cost
E)   marginal costF) A) and B)
G) D) and E)

Question 13

Companies bringing out a new product can choose between three broad strategies: a skimming price, penetration pricing, and trial pricing. Distinguish among the three.

Accepted Answer

A skimming price is used to skim revenue...

Question 14

Which of the following is a reason that a marketer would choose a penetration pricing strategy?

Accepted Answer

A)   to ensure the company has the ability to increase prices once demand decreases
B)   to focus on the rapid achievement of profit objectives
C)   to appeal to different consumer segments with different levels of price sensitivity
D)   to create markets for highly technical products
E)   to discourage competition from entering the marketF) A) and B)
G) C) and D)

Question 15

In some states, unfair trade practices acts are designed to ________.

Accepted Answer

A)   regulate the markups used by various industries
B)   control the sale of agricultural products and raw materials
C)   regulate all forms of psychological pricing
D)   prohibit the selling of products below cost
E)   ban the use of price liningF) None of the above
G) A) and B)

Question 16

A list price is also referred to as a ________.

Accepted Answer

A)   captive price
B)   bundled price
C)   channel price
D)   suggested retail price
E)   basing-point priceF) A) and E)
G) A) and B)

Question 17

Which of the following is true about the demand curve?

Accepted Answer

A)   It is used to illustrate the effect of price on the quantity supplied.
B)   It is always graphically depicted by a straight line.
C)   It shows the quantity of product customers will buy in a market during a period of time even if other factors change.
D)   It usually slopes upward and to the right.
E)   It shows the relationship between product demand and product price.F) All of the above
G) B) and D)

Question 18

Which of the following is a set price or price range in consumers' minds that they refer to in evaluating a product's price?

Accepted Answer

A)   dynamic price
B)   internal reference price
C)   suggested retail price
D)   captive price
E)   value priceF) C) and E)
G) A) and B)

Question 19

Surge pricing occurs when a company raises the price of its product when demand for the product goes up and lowers the price of its product when demand goes down.

Accepted Answer

A) True 
 B)False

Question 20

The method of setting prices in which marketers total all the costs for the product and then add an amount to arrive at the selling price is called ________.

Accepted Answer

A)   supply-based pricing
B)   target costing
C)   cost-plus pricing
D)   yield management pricing
E)   demand-based pricingF) C) and D)
G) A) and D)

Exam 10: Price: What Is the Value Proposition Worth

By using ________, a company deliberately sets a low price with the intention of driving its competition out of business.

Correct AnswerverifiedShow Answer

The method of setting prices in which marketers total all the costs for the product and then add an amount to arrive at the selling price is called ________.

Correct AnswerverifiedShow Answer

A list price is also referred to as a ________.

Correct AnswerverifiedShow Answer

What are the advantages of digital currencies such as Bitcoin?

Correct AnswerverifiedDigital currencies such as Bitcoin have ...View AnswerShow Answer

Which of the following is a set price or price range in consumers' minds that they refer to in evaluating a product's price?

Correct AnswerverifiedShow Answer

To encourage customers to buy the $799 dining room suite, the furniture store set a much cheaper and shoddily made set next to the more expensive furniture, thereby using the contrast effect.

Correct AnswerverifiedShow Answer

How is the price elasticity of demand calculated?

Correct AnswerverifiedShow Answer

In a market with ________, there are many sellers, each offering a slightly different product. Firms can differentiate products and focus on nonprice competition.

Correct AnswerverifiedShow Answer

If a product has a close substitute, its demand will likely be ________.

Correct AnswerverifiedShow Answer

Price segmentation is the practice of charging different prices to different market segments for the same product.

Correct AnswerverifiedShow Answer

The value of something we give up in order to obtain something else is referred to as a(n) ________.

Correct AnswerverifiedShow Answer

Which of the following is a reason that a marketer would choose a penetration pricing strategy?

Correct AnswerverifiedShow Answer

In which type of pricing is the selling price based on an estimate of volume or quantity a firm can sell in different markets at different prices?

Correct AnswerverifiedShow Answer

________ are the per-unit costs of production that will fluctuate depending on how many units or individual products a firm produces.

Correct AnswerverifiedShow Answer

Surge pricing occurs when a company raises the price of its product when demand for the product goes up and lowers the price of its product when demand goes down.

Correct AnswerverifiedShow Answer

In some states, unfair trade practices acts are designed to ________.

Correct AnswerverifiedShow Answer

A retailer that uses the list price for products but runs frequent promotions that heavily discount some products is using which type of pricing strategy?

Correct AnswerverifiedShow Answer

________ is the assignment of value, or the amount a consumer must give to receive a product.

Correct AnswerverifiedShow Answer

Companies bringing out a new product can choose between three broad strategies: a skimming price, penetration pricing, and trial pricing. Distinguish among the three.

Correct AnswerverifiedA skimming price is used to skim revenue...View AnswerShow Answer

Which of the following is true about the demand curve?

Correct AnswerverifiedShow Answer

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Digital currencies such as Bitcoin have ...
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A skimming price is used to skim revenue...
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