Question 1

Explain the concept of trial pricing. Why would a retailer implement this pricing strategy?

Accepted Answer

Trial pricing is used when a n...

Question 2

Which of the following is a measure of customers' sensitivity to changes in price?

Accepted Answer

A)   liquidity ratio
B)   break-even point
C)   price elasticity of demand
D)   marginal analysis
E)   basing-pointF) D) and E)
G) B) and E)

Question 3

In a(n)  ________, all of the buyers know the highest price bid at any point in time.

Accepted Answer

A)   reverse auction
B)   dynamic auction
C)   open auction
D)   reserve auction
E)   price-lining auctionF) A) and E)
G) A) and D)

Question 4

Sellers should know that the less elastic the demand for their product, the more advantageous it is for them to ________.

Accepted Answer

A)   drop the price
B)   raise the price
C)   maintain the price
D)   discontinue the item
E)   bundle the item with another productF) A) and D)
G) B) and D)

Question 5

The most common cost-based approach to pricing is ________.

Accepted Answer

A)   demand-based pricing
B)   psychological pricing
C)   yield management pricing
D)   cost-plus pricing
E)   high/low pricingF) C) and D)
G) A) and E)

Question 6

A firm is using a(n)  ________ strategy when it introduces a product at a very low price to gain market share early on.

Accepted Answer

A)   skimming price
B)   trial pricing
C)   intensive pricing
D)   penetration pricing
E)   high/lowF) A) and B)
G) A) and E)

Question 7

Which of the following occurs when price is inelastic?

Accepted Answer

A)   Price and revenue change in the same direction.
B)   Revenues decrease when price increases.
C)   Revenue is unaffected by price changes.
D)   Quantity demanded increases when price increases.
E)   The demand curve is more horizontal.F) B) and D)
G) B) and C)

Question 8

________ refers to the sale of two or more goods or services as a single package for one price.

Accepted Answer

A)   Two-part pricing
B)   Captive pricing
C)   Price bundling
D)   Decoy pricing
E)   Trial pricingF) C) and D)
G) A) and C)

Question 9

________ is a new business strategy of offering a basic version of a product free of charge and then charging for upgraded versions of the product.

Accepted Answer

A)   Prestige pricing
B)   Freemium
C)   Price segmentation
D)   Reverse marketing
E)   Dynamic marketingF) A) and B)
G) A) and C)

Question 10

Many people rely on a prescription drug to control their cholesterol. An increase in the price of the drug would have little effect on the quantity demanded because there are no substitutes for the drug and because people who take it have no choice but to continue taking it if they wish to stay healthy. The demand for the cholesterol drug is ________.

Accepted Answer

A)   elastic
B)   inelastic
C)   cross-elastic
D)   supply-driven
E)   asymmetricalF) All of the above
G) D) and E)

Question 11

Value pricing is the opposite of cost-based pricing.

Accepted Answer

A) True 
 B)False

Question 12

Explain the difference between elastic demand and inelastic demand.

Accepted Answer

Elastic demand occurs when a change in p...

Question 13

Which of the following statements about price is true?

Accepted Answer

A)   Pricing is the least important marketing mix element.
B)   Price is always a monetary value.
C)   Price can mean exchange of nonmonetary goods or services.
D)   Most consumers believe price has little influence on their purchase decisions.
E)   Pricing is unaffected by changes in the business cycle.F) B) and D)
G) All of the above

Question 14

Explain the concept of price bundling. Why would a retailer implement this pricing strategy? Give one example of this strategy being implemented.

Accepted Answer

Price bundling means selling two or more...

Question 15

Which of the following is NOT a type of pricing objective?

Accepted Answer

A)   elasticity
B)   market share
C)   profit
D)   competitive effect
E)   image enhancementF) B) and D)
G) A) and C)

Question 16

Trade or functional discounts are offered by manufacturers to which of the following?

Accepted Answer

A)   channel intermediaries who perform wholesaling tasks that the manufacturer would otherwise have to perform
B)   consumers who earn a price reduction for buying in bulk
C)   intermediaries who pay their bills before they are due
D)   manufacturers that agree to exclusive distribution contracts
E)   the government market and other organizations that require bid proposalsF) A) and B)
G) A) and C)

Question 17

The simplest pricing method is break-even pricing: adding a standard markup to the cost of the product.

Accepted Answer

A) True 
 B)False

Question 18

When demand is ________, increases in price result in increases in total revenues, while decreases in price result in decreases in total revenue.

Accepted Answer

A)   elastic
B)   inelastic
C)   flexible
D)   supply-driven
E)   cross-elasticF) A) and E)
G) A) and C)

Question 19

For a company that manufactures plastic signs, the printing press to make the signs, the manager's salary, and the utilities are all examples of ________.

Accepted Answer

A)   fixed costs
B)   average fixed costs
C)   variable costs
D)   marginal costs
E)   everyday costsF) A) and E)
G) None of the above

Question 20

A demand curve never appears on a graph as a straight line.

Accepted Answer

A) True 
 B)False

Exam 10: Price: What Is the Value Proposition Worth

Sellers should know that the less elastic the demand for their product, the more advantageous it is for them to ________.

Correct Answer
verified

________ is a new business strategy of offering a basic version of a product free of charge and then charging for upgraded versions of the product.

Correct Answer
verified

Correct Answer
verified

Trade or functional discounts are offered by manufacturers to which of the following?

Correct Answer
verified

Which of the following occurs when price is inelastic?

Correct Answer
verified

In a(n) ________, all of the buyers know the highest price bid at any point in time.

Correct Answer
verified

Which of the following is NOT a type of pricing objective?

Correct Answer
verified

For a company that manufactures plastic signs, the printing press to make the signs, the manager's salary, and the utilities are all examples of ________.

Correct Answer
verified

Explain the difference between elastic demand and inelastic demand.

Correct Answer
verified
Elastic demand occurs when a change in p...
View Answer

The simplest pricing method is break-even pricing: adding a standard markup to the cost of the product.

Correct Answer
verified

Which of the following is a measure of customers' sensitivity to changes in price?

Correct Answer
verified

When demand is ________, increases in price result in increases in total revenues, while decreases in price result in decreases in total revenue.

Correct Answer
verified

A demand curve never appears on a graph as a straight line.

Correct Answer
verified

Explain the concept of price bundling. Why would a retailer implement this pricing strategy? Give one example of this strategy being implemented.

Correct Answer
verified
Price bundling means selling two or more...
View Answer

Which of the following statements about price is true?

Correct Answer
verified

________ refers to the sale of two or more goods or services as a single package for one price.

Correct Answer
verified

Value pricing is the opposite of cost-based pricing.

Correct Answer
verified

Explain the concept of trial pricing. Why would a retailer implement this pricing strategy?

Correct Answer
verified
Trial pricing is used when a n...
View Answer

The most common cost-based approach to pricing is ________.

Correct Answer
verified

A firm is using a(n) ________ strategy when it introduces a product at a very low price to gain market share early on.

Correct Answer
verified

Exam 10: Price: What Is the Value Proposition Worth

Sellers should know that the less elastic the demand for their product, the more advantageous it is for them to ________.

Correct AnswerverifiedShow Answer

________ is a new business strategy of offering a basic version of a product free of charge and then charging for upgraded versions of the product.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Trade or functional discounts are offered by manufacturers to which of the following?

Correct AnswerverifiedShow Answer

Which of the following occurs when price is inelastic?

Correct AnswerverifiedShow Answer

In a(n) ________, all of the buyers know the highest price bid at any point in time.

Correct AnswerverifiedShow Answer

Which of the following is NOT a type of pricing objective?

Correct AnswerverifiedShow Answer

For a company that manufactures plastic signs, the printing press to make the signs, the manager's salary, and the utilities are all examples of ________.

Correct AnswerverifiedShow Answer

Explain the difference between elastic demand and inelastic demand.

Correct AnswerverifiedElastic demand occurs when a change in p...View AnswerShow Answer

The simplest pricing method is break-even pricing: adding a standard markup to the cost of the product.

Correct AnswerverifiedShow Answer

Which of the following is a measure of customers' sensitivity to changes in price?

Correct AnswerverifiedShow Answer

When demand is ________, increases in price result in increases in total revenues, while decreases in price result in decreases in total revenue.

Correct AnswerverifiedShow Answer

A demand curve never appears on a graph as a straight line.

Correct AnswerverifiedShow Answer

Explain the concept of price bundling. Why would a retailer implement this pricing strategy? Give one example of this strategy being implemented.

Correct AnswerverifiedPrice bundling means selling two or more...View AnswerShow Answer

Which of the following statements about price is true?

Correct AnswerverifiedShow Answer

________ refers to the sale of two or more goods or services as a single package for one price.

Correct AnswerverifiedShow Answer

Value pricing is the opposite of cost-based pricing.

Correct AnswerverifiedShow Answer

Explain the concept of trial pricing. Why would a retailer implement this pricing strategy?

Correct AnswerverifiedTrial pricing is used when a n...View AnswerShow Answer

The most common cost-based approach to pricing is ________.

Correct AnswerverifiedShow Answer

A firm is using a(n) ________ strategy when it introduces a product at a very low price to gain market share early on.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Elastic demand occurs when a change in p...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Price bundling means selling two or more...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Trial pricing is used when a n...
View Answer

Correct Answer
verified

Correct Answer
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