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100 + MCQs_Pricing Considerations and Approaches




Question;1.;The price of an executive is a;the price of a salesperson is a _____, and the price of a worker is a;a.;commission, wage, salary;b.;wage, commission, salary;c.;salary, wage, commission;d.;salary, commission, wage;2.;is the amount of money;charged for a product or service.;a.;Experience curve;b.;Demand curve;c.;Price;d.;Wage;3.;Little Roses? Floral Design;sells flowers at one set price to all buyers.;What is this an example of?;a.;total costs;b.;fixed costs;c.;variable costs;d.;dynamic pricing;4.;Big Mike?s Health Food Store;sells nutritional energy-producing foods.;The price of the products sold varies according to individual customer;accounts and situations. For example;long-time customers receive discounts.;This strategy is an example of _____.;a.;price elasticity;b.;cost-plus pricing;c.;dynamic pricing;d.;value pricing;5.;Price is the only element in;the marketing mix that produces _____.;a.;revenue;b.;variable costs;c.;expenses;d.;fixed costs;6.;Companies set _____ as their;major objective if they are troubled by too much capacity, heavy competition;or changing consumer wants.;a.;current profit maximization;b.;survival;c.;market share leadership;d.;product quality leadership;7.;Lawnmowers of Chicago is a landscaping;company established throughout the American Midwest. Upon entering a new community, lower prices;are asked for their services. After;gaining a respectable reputation in a new area, prices are gradually;increased. Starting a business in this;manner is an example of which marketing objective?;a.;current profit maximization;b.;market share leadership;c.;product quality leadership;d.;survival;8.;Firms set prices as low as;possible in order to become the _____.;a.;product quality leader;b.;market share leader;c.;customer quality leader;d.;profit maximization leader;9.;Caterpillar charges 20 percent;to 30 percent more than competitors for its heavy construction equipment based;on superior product and service quality.;This is an example of _____.;a.;survival;b.;current profit maximization;c.;market share leadership;d.;product quality leadership;10.;Companies may set prices low;for which of the following reasons?;a.;to prevent competition from;entering the market;b.;to stabilize the market;c.;to create excitement for a;product;d.;all of the above;11.;Which of the following pricing;objectives is most used by a university?;a.;partial cost recovery;b.;full cost recovery;c.;social price;d.;cost-plus pricing;12.;Swatch surveyed the market and;identified an unserved segment of watch buyers.;Using these results, they created a watch at a price consumers were;willing to pay. The unorthodox order of;this marketing mix decision is an example of _____.;a.;competition-based pricing;b.;cost-plus pricing;c.;target costing;d.;value-based pricing;13.;Johnson Controls produces;climate-control systems for office buildings.;Research showed that customers were more concerned about the total cost;of installing and maintaining a system than its initial price. This knowledge is an example of _____, which;the company may use to become more competitive.;a.;target costing;b.;value pricing;c.;cost-plus pricing;d.;a nonprice position;14.;Costs that do not vary;with production or sales level are referred to as _____.;a.;fixed costs;b.;variable costs;c.;target costs;d.;total costs;15.;Costs that vary directly with;the level of production are referred to as _____.;a.;fixed costs;b.;variable costs;c.;target costs;d.;total costs;16.;are the sum of the;and _____ for any given level of production.;a.;Fixed costs, variable, total;costs;b.;Fixed costs, total, variable;costs;c.;Variable costs, fixed, total costs;d.;Total costs, fixed, variable;costs;17.;SRAC is an acronym for _____.;a.;strategic reasoning and costs;b.;short-run accounting costs;c.;short-run average cost curve;d.;strategic rights and company;18.;Fixed costs _____ as number of;units produced increases.;a.;decrease;b.;increase;c.;divide in half;d.;remain the same;19.;The long-run average cost curve;(LRAC) helps the producer understand which of the following?;a.;It shows how large a business;should be, to be most efficient.;b.;It deals mainly with;competitor?s prices.;c.;It deals mainly with external;factors.;d.;none of the above;20.;As production experience;increases, the average cost per unit decreases.;This drop is called the _____.;a.;demand curve;b.;experience curve;c.;short-run average cost curve;d.;long-run average cost curve;21.;When a downward-sloping;experience curve exists, a company should usually ______ the selling price of;that product, in order to bring in higher revenues.;a.;increase;b.;greatly increase;c.;decrease;d.;not alter;22.;Price setting is usually;determined by ______ in small companies.;a.;top management;b.;marketing departments;c.;sales departments;d.;divisional managers;23.;Price setting is usually;determined by _____ in large companies.;a.;top management;b.;divisional managers;c.;product line managers;d.;both b and c;24.;In industrial markets;has the final say in setting the pricing objectives and policies of that;company.;a.;the sales manager;b.;top management;c.;the production manager;d.;the finance manager;25.;Which of the following falls;under the category of an industrial company?;a.;bubble gum producers;b.;furniture producers;c.;steel producers;d.;clothing producers;26.;Which of the following is an;external factor that affects pricing decisions?;a.;the salaries of production;management;b.;competition;c.;the salaries of finance;management;d.;funds expensed to clean;production equipment;27.;Under _____, the market;consists of many buyers and sellers trading in a uniform commodity such as;wheat, copper, or financial securities.;a.;pure competition;b.;monopolistic competition;c.;oligopolistic competition;d.;pure monopoly;28.;In Lima, Peru, twenty stores;specializing in selling the same quality and brand of wheat products are;located on one street. An individual;seller cannot charge more than the going price without the risk of;losing business to the other stores that are still selling the product at its;uniform price. This is an example of;what type of market?;a.;pure competition;b.;monopolistic competition;c.;oligopolistic competition;d.;pure monopoly;29.;Under _____, the market;consists of many buyers and sellers who trade over a range of prices rather;than a single market price.;a.;pure competition;b.;monopolistic competition;c.;oligopolistic competition;d.;pure monopoly;30.;Under _____, the market;consists of a few sellers who are highly sensitive to each other?s pricing and;marketing strategies.;a.;pure competition;b.;monopolistic competition;c.;oligopolistic competition;d.;pure monopoly;31.;In _____, competition is not;a price setting consideration.;a.;Bob?s Shiny Copper Products;b.;Kinko?s;c.;Randy Rotsky?s Car Sales;d.;The U.S. Postal Service;32.;Nonregulated monopolies are;free to price at what the market will bear.;However, they do not always charge the full price for a number of;reasons. What is not one of those;reasons?;a.;They desire to attract;competition.;b.;They desire to penetrate the;market faster with a low price.;c.;They have a fear of government;regulation.;d.;They want to encourage;government regulations.;33.;If customers perceive that the;price is greater than the product?s value, they will buy it, but the seller;loses _____.;a.;target cost;b.;price elasticity;c.;profit opportunities;d.;break-even pricing;34.;The relationship between the;price charged and the resulting demand level can be shown as the _____.;a.;demand curve;b.;variable cost;c.;target cost;d.;break-even pricing;35.;When Gibson Guitar Corporation;lowered its prices to compete more effectively with Japanese rivals, why did;they not sell more guitars?;a.;The Gibson guitars were not as;well made as the Japanese guitars.;b.;The market was already flooded;with guitars.;c.;The sound of the Gibson guitar;was not as good as the Japanese guitars.;d.;Customers were unable to;distinguish the superiority of the Gibson guitar when it was at a lower price.;36.;is how responsive demand will be to a change;in price.;a.;Price elasticity;b.;Break-even pricing;c.;Demand curve;d.;Target cost;37.;If demand hardly changes with a;small change in price, we say the demand is _____.;a.;variable;b.;inelastic;c.;value-based;d.;at break-even pricing;38.;If demand changes greatly with;a small change in price, we say the demand is _____.;a.;inelastic;b.;variable;c.;elastic;d.;value-based;39.;When we are talking about price;elasticity of demand, the less elastic the demand, the more it pays for the;seller to _____.;a.;drop the price;b.;raise the price;c.;leave the price where it is;d.;discontinue the item;40.;Buyers are less price sensitive;for all of the following reasons except;a.;when the product they are;buying is unique;b.;when the product they are;buying is in high demand;c.;when substitute products are;hard to find;d.;when the total expenditure for;a product is high relative to their income;41.;By pledging to be a leader in;providing clean, renewable energy sources and developing products and services;that help consumers protect the environment, Green Mountain Power competes;successfully against ?cheaper? brands that focus on more price-sensitive;consumers. They have the firm belief;that even kilowatt hours can be _____.;a.;cost-plus priced;b.;a demand curve;c.;differentiated;d.;value-based priced;42.;If Cannon Camera Company;follows a high-price, high-margin strategy, what will likely happen to other;companies such as Nikon, Minolta, and Pentax?;a.;They will go out of business.;b.;They will want to compete against;Cannon.;c.;They will advertise less.;d.;none of the above;43.;If Cannon Camera Company;follows a low-price, low-margin strategy, what will likely happen to other;companies such as Nikon, Minolta, and Pentax?;a.;They will not be able to;compete or it may drive them out of the market.;b.;They will want to compete;against Cannon.;c.;They will advertise less.;d.;none of the above;44.;When setting prices, the;company also must consider other factors in its external environment. _____ can have a strong impact on the firms;pricing strategies. This includes;factors such as boom or recession, inflation, and interest rates affecting;pricing decisions.;a.;Demand curve;b.;Economic conditions;c.;Target costing;d.;Value-based pricing;45.;When setting prices, the;company also must consider other factors in its external environment. How will _____ react to various prices? The company should set prices that will allow;these people to receive a fair profit.;a.;resellers;b.;producers;c.;consumers;d.;the elderly;46.;When companies set prices, the;government and social concerns are two _____ affecting pricing decisions.;a.;external factors;b.;internal factors;c.;economic conditions;d.;demand curves;47.;Product costs set a(n) _____ to;the price.;a.;demand curve;b.;experience curve;c.;floor;d.;learning curve;48.;Consumer perceptions of the;products value set the _____.;a.;demand curve;b.;floor;c.;ceiling;d.;variable cost;49.;Companies set prices by;selecting a general pricing approach that includes one or more of three sets of;factors. One of these is the cost-based;approach which means _____.;a.;value-based pricing;b.;going-rate and sealed-bid;pricing;c.;cost-plus pricing, break-even;analysis, and target profit pricing;d.;none of the above;50.;Companies set prices by;selecting a general pricing approach that includes one or more of three sets of;factors. One of these is the buyer-based;approach which means _____.;a.;value-based pricing;b.;going-rate and sealed-bid;pricing;c.;cost-plus pricing, break-even;analysis, and target profit pricing;d.;none of the above;51.;Companies set prices by;selecting a general pricing approach that includes one or more of three sets of;factors. One of these is the;competition-based approach which means _____.;a.;value-based pricing;b.;going-rate and sealed-bid;pricing;c.;cost-plus pricing, break-even;analysis, and target profit pricing;d.;none of the above;52.;Lawyers, accountants, and other;professionals typically price by adding a standard markup for profit. This is known as _____.;a.;variable costs;b.;cost-plus pricing;c.;value-based price;d.;break-even price;53.;pricing works only if;that price actually brings in the expected level of sales.;a.;Elasticity;b.;Markup;c.;Variable;d.;Inelasticity;54.;What is one reason that markup;pricing is not practical?;a.;Sellers earn a fair return on;their investment.;b.;By tying the price to cost;sellers simplify pricing.;c.;When all firms in the industry;use this pricing method, prices tend to be similar.;d.;This method ignores;demand.;55.;When all firms in the industry;use this pricing method, prices tend to be similar.;a.;markup pricing;b.;variable pricing;c.;inelasticity pricing;d.;elasticity pricing;56.;When all firms in the industry;use this pricing method, price competition is minimized.;a.;variable pricing;b.;markup pricing;c.;elasticity pricing;d.;inelasticity pricing;57.;Many people feel that;pricing is fairer to both buyers and sellers.;Sellers earn a fair return on their investment but do not take advantage;of buyers when buyers? demand becomes great.;a.;variable;b.;markup;c.;elasticity;d.;inelasticity;58.;Break-even pricing, or a;variation called _____ is when the firm tries to determine the price at which;it will break even to make the profit it is seeking.;a.;competition-based pricing;b.;target profit pricing;c.;fixed cost;d.;value-based pricing;59.;Target pricing uses the concept;of a _____, which shows the total cost and total revenue expected at different;sales volume levels.;a.;value-based chart;b.;break-even chart;c.;competition-based chart;d.;demand curve;60.;As a manufacturer increases;price, _____ volume drops.;a.;target;b.;break-even;c.;cost-plus pricing;d.;total cost;61.;As a manufacturer increases;price, _____ for their product falls off.;a.;cost-plus pricing;b.;value-based pricing;c.;demand;d.;the experience curve;62.;uses buyers? perceptions;of what a product is worth, not the seller?s cost, as the key to pricing.;a.;Value-based pricing;b.;Target costing;c.;Variable costs;d.;Price elasticity;63.;In _____, price is considered;along with the other marketing mix variables before the marketing program is;set.;a.;target pricing;b.;value-based pricing;c.;variable costs;d.;price elasticity;64.;pricing is product;driven. The company designs what it;considers to be a good product, totals the expenses of making the product, and;sets a price that covers costs plus a target profit.;a.;Value-based;b.;Fixed cost;c.;Cost-based;d.;Variable;65.;Value-based pricing is the;reverse process of what?;a.;variable cost pricing;b.;cost-plus pricing;c.;cost-based pricing;d.;none of the above;66.;In _____ price is set to match;consumers? perceived value.;a.;variable cost pricing;b.;cost-plus pricing;c.;cost-based pricing;d.;value-based pricing;67.;Measuring _____ can be;difficult. A company might conduct;surveys to test this of the different products they offer.;a.;price elasticity;b.;demand curve;c.;perceived value;d.;break-even pricing;68.;Under-priced products sell very;well, but they produce less revenue than they would have if price were raised;to the _____ level.;a.;perceived value;b.;value-based;c.;variable;d.;demand curve;69.;During the past decade;marketers have noted a fundamental shift in consumer attitudes toward price and;quality. How is this shift defined?;a.;Give customers more for less.;b.;Give customers more symbols.;c.;Customers demand higher quality;products.;d.;Customers want more selection.;70.;When Taco Bell and McDonald?s;offer meals at a lower price than what it would cost to purchase each;individual item from the meal it is called _____.;a.;break-even pricing;b.;target profit pricing;c.;value pricing;d.;cost-plus pricing;71.;involves redesigning;existing brands in order to offer more quality for a given price or the same;quality for less.;a.;Break-even pricing;b.;Target pricing;c.;Value pricing;d.;Cost-plus pricing;72.;is a company?s power to;maintain or even raise prices without losing market share.;a.;Variable cost;b.;Pricing power;c.;Target cost;d.;Fixed cost;73.;To maintain a company?s;a firm must retain or build the value of its marketing offer.;a.;variable cost;b.;pricing power;c.;target cost;d.;fixed cost;74.;When there is intense price;competition, many companies adopt _____ rather than cutting prices to match;competitors.;a.;pricing power;b.;value-added strategies;c.;fixed costs;d.;price elasticity;75.;What is the important type of;value pricing that Wal-Mart uses?;a.;competition-based pricing;b.;EDLP;c.;cost-plus pricing;d.;break-even pricing;76.;involves charging a;constant, everyday low price with few or no temporary price discounts.;a.;High-low pricing;b.;Target pricing;c.;Cost-plus pricing;d.;EDLP;77.;What is the type of pricing;that Kmart uses?;a.;EDLP;b.;variable pricing;c.;high-low pricing;d.;target pricing;78.;Retailers adopt EDLP for many;reasons. The most important of which is that _____.;a.;constant sales and promotions;are costly and have eroded consumer confidence in the credibility of everyday;shelf prices;b.;running frequent promotions to;lower prices temporarily on selected items brings more customers into their;stores;c.;when their level of production;is up, they can charge more for their products;d.;none of the above;79.;Some reasons that consumers;like _____ so well are because consumers have less time and patience for such;time-honored traditions as watching for supermarket specials and clipping;coupons.;a.;variable pricing;b.;high-low pricing;c.;EDLP;d.;break-even;80.;Why did Kmart?s strategy to;follow Wal-Mart?s EDLP fail?;a.;Kmart had too much inventory.;b.;Because Kmart had no friendly;greeters at their doors.;c.;Because Wal-Mart?s expenses are;only 15 percent of sales.;d.;Because K-mart customers;demanded high-low pricing.;81.;One form of _____ is going-rate;pricing, in which a firm bases its price largely on competitors? prices, with;less attention paid to its own costs or to demand.;a.;EDLP;b.;cost-plus pricing;c.;break-even pricing;d.;competition-based pricing;82.;One form of competition-based;pricing is _____, in which a firm bases its price largely on competitors?;prices, with less attention paid to its own costs or to demand.;a.;EDLP;b.;going-rate pricing;c.;cost-plus pricing;d.;break-even pricing;83.;is used when firms feel;that this price represents the collective wisdom of the industry concerning the;price that will yield a fair return.;a.;Going-rate pricing;b.;EDLP;c.;Cost-plus pricing;d.;Break-even pricing;84.;Firms feel that holding to;will prevent harmful price wars.;a.;sealed-bid pricing;b.;the demand curve;c.;price elasticity;d.;the going price;85.;Using _____, a company bases;its price on how it thinks competitors will price rather than on its own costs;or on the demand.;a.;sealed-bid pricing;b.;cost-plus pricing;c.;dynamic pricing;d.;market share leadership;86.;remains an important;element in the marketing mix. It is the;only element that produces revenue, all other elements represent costs.;a.;Current profit maximization;b.;Market share leadership;c.;Price;d.;Product quality leadership;87.;Common _____ objectives include;survival, current profit maximization, market share leadership, and product;quality leadership.;a.;pricing;b.;management;c.;marketing mix;d.;cost-plus pricing;88.;usually sets pricing;policies and approves proposed prices.;a.;A customer;b.;Accounting management;c.;Finance management;d.;None of the above;89.;that influence pricing;decisions include the nature of the market and demand, competitors? prices and;offers, and factors such as the economy, reseller needs, and government;actions.;a.;Internal factors;b.;Elasticity;c.;External factors;d.;Target factors;90.;The more _____ the demand, the;higher the company can set its price.;a.;elastic;b.;external;c.;internal;d.;inelastic


Paper#37288 | Written in 18-Jul-2015

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