Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
59 Cards in this Set
- Front
- Back
|
Which of the following is NOT a factor that will affect the price elasticity of demand for a particular product?
a. An increase in price for the product b. An increase in consumer income c. The availability of substitute products d. The availability of complementary products e. The cross-elasticity of related products |
a. An increase in price for the product
|
|
|
Last year, BruceCo sold 1000 coffee cups for $10 each. This year, the company is plannin on selling 1500 coffee cups. In order to cover the additional investment they will charge $10.50 for the first 500 cups, $10.25 for the second 500 cups and $10 for the last 500. Each cup costs $4.70 to produce. What is the marginal revenue for the 1125th cup?
a. $10.25 b. $10.50 c. $10.00 d. $1,250 e. $5.30 |
c. $10.00
|
|
|
Price elasticity is the slope of the demand curve. When price elasticity is HIGH?
a. you can increase revenues by cutting prices b. you can decrease revenues by cutting prices c. you can increase revenue by increasing prices d. you can increase profits by cutting prices e. you can decrease profits by decreasing prices |
a. you can increase revenues by cutting prices
|
|
|
Last year, BruceCo sold 1000 coffee cups for $10 each. This year, the company is plannin on selling 1500 coffee cups. In order to cover the additional investment they will charge $10.50 for the first 500 cups, $10.25 for the second 500 cups and $10 for the last 500. Each cup costs $4.70 to produce. What is the marginal profit for the 1125th cup?
a. $10.25 b. $10.50 c. $10.00 d. $4.70 e. $5.30 |
e. $5.30
|
|
|
[Edit]
[Delete] Last year, BruceCo sold 1000 coffee cups for $10 each. This year, the company is plannin on selling 1500 coffee cups. In order to cover the additional investment they will charge $10.50 for the first 500 cups, $10.25 for the second 500 cups and $10 for the last 500. Each cup costs $4.70 to produce. What is the marginal profit for the 1125th cup? a. $10.25 b. $10.50 c. $10.00 d. $4.95 e. $5.55 |
e. $5.55
|
|
|
For many products such as candy bars, there is a price consumers expect to pay for the product. Companies using the ________ to setting prices will use this price as a basis for positioning their products as prestige or value brands?
a. customary pricing approach b. above or below approach c. loss-leader approach d. captive approach e. price leadership approach |
b. above or below approach
hint: there is a price consumers expect to pay... hence the answer |
|
|
The Senseo coffee maker is a machine that makes one cup of coffee at a time from specifically prepared "pods" of coffee. You can get the coffee maker at a reasonable price. However, you can only get refill pods from the manufacturer and they tend to be expensive. This is an example of?
a. captive pricing b. price bundling c. prestige pricing d. convenience pricing e. yield management pricing |
a. captive pricing
it's captive cuz the coffee maker is cheap so you buy it without realizing the "pods" are expensive. |
|
|
Experience has shown that customers perceive a price of $99.99 to be significantly lower than a price of $100. The pricing strategy that takes advantage of this phenomenon is called
a. odd-even pricing b. price line pricing c. yield management pricing d. price bundling e. penetration pricing |
a. odd-even pricing
$99.99 is an odd number, $100 is an even number |
|
|
It has been said that no two people on the airplane pay the same price for a ticket. Prices tend to be lower if you are willing to book your trip well in advance and tend to be much higher if you have to book your trip on short notice. A non-refundable ticket costs less than a refundable ticket. Airlines use this ______ in order to maximize the revenue they earn from each flight.
a. captive pricing b. price bundling c. prestige pricing d. flexible e. yield management pricing |
e. yield management pricing
|
|
|
_________ is used in situations where the final cost of good or service may not be available at the time the agreement is reached?
a. standard markup pricing b. cost plus pricing c. price floor pricing d. price ceiling pricing e. flexible pricing |
b. cost plus pricing
|
|
|
BruceCo is planning on selling coffee cups for $14 each. The company can buy the cups for $2 and have them printed for $1.50. The package costs fifty cents. There is a one time set up charge from the printer of $1,000. How many coffeee cups will BruceCo have to sell in order to break even?
a. 100 b. 250 c. 84 d. 72 e. cannot be determined with this information |
a. 100
|
|
|
Which of the statements about costs is true?
a. in the long run, your revenue has to exceed your marginal cost b. in the short run, your revenue has to exceed your total cost c. in the short run, your revenue has to exceed your variable costs d. in the long run, your revenue has to exceed your variable costs, but not your total costs e. in the long run, profit has to exceed your revenue |
a. in the long run, your revenue has to exceed your marginal costs
|
|
|
which of the following companies will have the easiest time in changing its price?
a. a company that sells rocket engines to NASA b. a company that sells collectible dolls through a mail-order catalog c. a company that sells collectible dolls through a store in an upscale mall d. a company that sells collectible dolls through a discount store e. a company that sells collectible dolls in an "everythin is 99 cents" store |
a. a company that sells rocket engines to NASA
|
|
|
Which of the following is an example of a question that can be answered using breakeven analysis?
a. how many additional units must we sell to pay for an advertising campaign? b. how much will revenue have to increase before a new investment in plant becomes profitable c. how much will we have to increase our price to meet a target return of 7.5% assuming sales remain constant? d. can we stay profitable if we match a competitor's price cut in order to maintain sales volume e. all of these are questions that can be answered using break even analysisis |
e. all of these questions that can be answered using break even analysis
|
|
|
For prestige products, products that are consumed socially and confer status on their owners?
a. unit sales of the product can decrease if prices are lowered b. demand elasticity is inverted c. demand increases when consumer income decreases d. an increase in price will increase unit sales and decrease average revenue e. value can be increased by reducing price. |
a. unit sales of the product can decrease if prices are lowered
|
|
|
Manny opened a coffee shop right across the street from a Barstucks coffee shop. Manny had
studued the market and he knew that it cost Barstucks, a national chain, $1.40 to make a cup of coffee he that sold for $2.50. He could make the same cup of coffee for $1.10 and could sell it profitably for $2.25. The day he opened his shop, the Barstucks across the street offered a 99cent cup of coffee special. No customers came to Manny, store and he had to close. The day he closed his store, the Barstucks 99 cent special ended. This was probably? a. predatory pricing b. price fixing c. price discrimation d. bait and switch pricing |
a. predatory pricing
|
|
|
For many products such as candy bars, there is a price consumers expect to pay for the product.
Companies using the _____________ to setting prices will use this price for their products? a. Customary pricing approach b. Above or below approach c. loss-leader approach d. Captive approach e. Price leadership approach |
a. customary pricing approach
|
|
|
The San Francisco Municipal Railway (MUNI) Charges $1.50 for an adult passenger. Once you
have purchased a fare (and taken a transfer as proof of payment) you can ride anywhere on the system for the next 90 minutes. This is an example of __________ geographic pricing. a. FOB factory b. Uniform delivered price c. Zone delivered price d. Freight absorption e. Promotional allowance. |
b. uniform delivered price
|
|
|
Eseffisue Company has developed a portable solar-powered global positioning (GPS) device.
There is a high demand for the product and until now, there wasn't anything like it on the market at any price. The company has a patent and the most important attribute for a GPS device is quality. Eseffisue Company should use a ____________ approach to pricing this product? a. Skimming b. Penetration c. Trial pricing d. Variable price e. Environmental |
a. skimming
|
|
|
Which of the following is NOT part of the price of a credit card for college students?
a. The interest rate charged on purchases b. A monthly fee for the card c. A 3% charge for cash advances d. Feeling depressed because of your credit card debt. e. All of these are part of the price of a credit card for college students |
e. all of these are part of the price of a credit card for college students
|
|
|
Last year, BruceCo sold 1000 coffee cups for $10 each. This year, the company is planning on
selling 1500 coffee cups. In order to cover the additional investment they will charge $10.50 for the first 500 cups, $10.25 for the second 500 cups and $10 for the last 500. Each cup costs $4.70 to produce. What is the average profit if they sell all 1500 cups? a. $5.80 b. $10.25 c. $4.70 d. $5.55 e. $5.30 |
d. $5.55
|
|
|
_________ is the money or other considerations (including other goods or services) exchanged for
the ownership or use of a good or service? a. Price b. Expense c. Revenue d. Value e. Barter |
a. price
|
|
|
Bruce is planning on selling sandwiches in class for $5 each. Food costs are $4. He will also need
to buy an insulated cooler to store the sandwiches. This cooler costs $10. Bruce needs to make a profit of $25 to make it worth his while. How many sandwiches does Bruce need to sell to make the project worthwhile? a. 35 b. 7 c. 10 d. 25 e. cannot be determined with this information |
a. 35
|
|
|
If the demand curve for a product shifts outward then?
a. Customers will buy more at every price point b. Customers will buy more at higher prices and less at lower prices c. Customers will buy less at higher prices and more at lower prices d. A small increase in price will lead to a much larger increase in sales. e. A small increase in price will lead to a much larger decrease in sales |
a. customers will buy more at every price point
|
|
|
It has been said that no two people on an airplane pay the same price for a ticket. Prices tend to be
lower if you are willing to book you trip well in advance and tend to be much higher if you have to book your trip on short notice. A non-refundable ticket costs less than a refundable ticket. Airlines use this ___________ in order to maximize the revenue they earn from each flight? a. Captive pricing b. Price bundling c. Prestige pricing d. Flexible e. Yield management pricing. |
e. yield management pricing
|
|
|
Colgate Palmolive created a special package that included a free regular-sized tube of toothpaste
when you purchase a family-sized tube of toothpaste at the regular price. This is an example of? a. Price bundling b. Captive pricing c. Odd-even pricing d. target-cost pricing e. Trial pricing. |
a. price bundling
|
|
|
Manny opened a coffee shop right across the street from a Barstucks coffee shop. Manny had studued the market and he knew that it cost Barstucks, a national chain, $1.40 to make a cup of coffee he that sold for $2.50. He could make the same cup of coffee for $1.10 and could sell it
profitably for $2.25. The day he opened his shop, the Barstucks across the street offered a 99cent cup of coffee special. No customers came to Manny store and he had to close. The day he closed his store, the Barstucks 99 cent special ended. This was probably? a. Predatory pricing b. Price fixing. c. Price discrimination d. Bait and switch pricing. e. A coincidence. |
a. predatory pricing
|
|
|
Which of the following situations is probably illegal price discrimination as determined by the
Robinson-Patman Act? a. A gasoline refinery sells gasoline to its dealers for 50 cents less than to independent dealers because it doesn t want independent dealers selling gasoline at lower prices than the company s dealer network. b. The Frito Lay company sells potato chips to Wal Mart for less money than to a local grocery store because Wal Mart buys in very large quantities in order to be able to offer low prices. c. A gasoline filling station charges customers who use a credit card or an ATM card three cents extra per gallon. d. A bank charges a lower fee for a checking account to customers who have agreed to have their paychecks deposited to the account automatically? e. These are all examples of illegal price discrimination. |
a. A gasoline refinery sells gasoline to its dealers for 50 cents less than to
independent dealers because it doesn t want independent dealers selling gasoline at lower prices than the company s dealer network. |
|
|
BruceCo was planning on introducing a line of premium coffee cups. The cups would sell for $10
which was higher than any other comparable coffee cup. In order to position the product as a prestige good, it was important that it be the most expensive in any store that offered it. In order to carry the coffee cup, a dealers had to sign an agreement that they would not put it on sale or sell it for less than $10. This is an example of? a. Vertical price fixing b. Horizontal price fixing c. Bait and switch pricing d. Deceptive pricing e. Price discrimination. |
a. vertical price fixing
|
|
|
BruceCo is planning on selling coffee cups for $14 each. The company can buy the cups for $2.00
and have them printed for $1.50. The package costs fifty cents. There is a one-time set up charge from the printer of $1,000. How many coffee cups will BruceCo have to sell in order to break even? a. 100 b. 250 c. 84 d. 72 e. cannot be determined with this information |
a. 100
|
|
|
For prestige products products that are consumed socially and confer status on their owners?
a. Unit sales of the product can decrease if prices are lowered. b. Demand elasticity is inverted. c. Demand increases when consumer income decreases d. An increase in price will increase unit sales and decrease average revenue. e. Value can be increased by reducing price. |
a. unit sales of the product can decrease if prices are lowered
|
|
|
Manny opened a coffee shop right across the street from a Barstucks coffee shop. Manny had
studued the market and he knew that it cost Barstucks, a national chain, $1.40 to make a cup of coffee he that sold for $2.50. He could make the same cup of coffee for $1.10 and could sell it profitably for $2.25. The day he opened his shop, the Barstucks across the street offered a 99cent cup of coffee special. No customers came to Manny store and he had to close. The day he closed his store, the Barstucks 99 cent special ended. This was probably? a. Predatory pricing b. Price fixing. c. Price discrimination d. Bait and switch pricing. e. A coincidence. |
a. predatory pricing
|
|
|
For many products such as candy bars, there is a price consumers expect to pay for the product.
Companies using the _____________ to setting prices will use this price for their products? a. Customary pricing approach b. Above or below approach c. loss-leader approach d. Captive approach e. Price leadership approach |
a. customary pricing approach
|
|
|
The San Francisco Municipal Railway (MUNI) Charges $1.50 for an adult passenger. Once you
have purchased a fare (and taken a transfer as proof of payment) you can ride anywhere on the system for the next 90 minutes. This is an example of __________ geographic pricing. a. FOB factory b. Uniform delivered price c. Zone delivered price d. Freight absorption e. Promotional allowance. |
b. uniform delivered price
|
|
|
In general, the greater the _______ for a product, the higher the price you can charge for the
product. a. demand b. cost of changing prices c. number of competitors d. experience curve e. number of substitutes |
a. demand
|
|
|
Which of the following is a form of price?
a. An insurance premium b. A salesperson s commission c. Tuition for Marketing 431 d. The annual salary of professional athlete e. These are all forms of price |
e. these are all forms of price
|
|
|
An inverse demand curve is usually associated with luxury pr prestige goods. With an inverse
demand curve, within a certain range of prices? a. An increase in price will lead to an increase in the quantity demanded b. An increase in price will lead to a decrease in the quantity demanded c. A decrease in price will lead to an increase in the quantity demanded d. There is no limit to the quantity demanded. e. A discount will lead to an increase in the quantity demanded |
a. an increase in price will lead to an increase in the quantity demanded
demand = increase in price equals decrease in quantity. inverse demand = inverse... duhhh |
|
|
According to your text, and your instructor, which of the following pricing objectives is commonly
used by publicly traded American firms? a. maximizing current profit b. managing for long-run profit c. survival d. market share e. social responsibility |
a. maximizing current profit
|
|
|
A research study conducted on 1000 large US corporations concluded that small changes in price
can have a large impact on units sold and on profits. The study found that a 1% increase in price translates to a _____ increase in profits, other things being the same? a. 1% b. 2% c. 4% d. 6% e. 12% |
e. 12%
|
|
|
Many airlines advertise low prices on the internet. When you actually book the ticket, you may find
that there are destination charges, service, fees and other costs that significantly increase the cost of the ticket. The airlines use this _________ tactic to make their prices appear to be lower to customers who are comparing prices. a. Multiple price b. Flexible price c. Captive price d. Single price e. Discount price |
a. multiple price
|
|
|
For many products such as candy bars, there is a price consumers expect to pay for the product.
Companies using the _____________ to setting prices will use this price for their products? a. Customary pricing approach b. Above or below approach c. loss-leader approach d. Captive approach e. Price leadership approach |
a. customary pricing approach
|
|
|
Bruce ordered a test bank from teachersupplies.com. The cost of the package was $39.95 plus
sales tax (you are responsible for California sales tax, even if you order online). He chose to have the product shipped via UPS ground because it was the least expensive shipping option. Teachersupplies.com is using a ___________ approach to geographic pricing? a. FOB factory b. Uniform delivered price c. Zone delivered price d. Freight absorption e. Promotional allowance. |
a. FOB factory
|
|
|
BruceCo was planning on introducing a line of premium coffee cups. The cups would sell for $10
which was higher than any other comparable coffee cup. In order to position the product as a prestige good, it was important that it be the most expensive in any store that offered it. In order to carry the coffee cup, a dealers had to sign an agreement that they would not put it on sale or sell it for less than $10. This is an example of? a. Vertical price fixing b. Horizontal price fixing c. Bait and switch pricing d. Deceptive pricing e. Price discrimination. |
a. vertical price fixing
|
|
|
For companies operating in an oligopoly market structure, prices tend to be very stable. In these
situations, the company with the largest market share might raise its prices in hopes that other, smaller companies will follow. If this happens, the price will increase. This is called the ____________ to setting prices? a. Customary pricing approach b. Above or below approach c. loss-leader approach d. Price leadership approach e. Price line approach |
d. price leadership approach
|
|
|
Which of the following is an example of a question that can be answered using breakeven
analysis? a. How many additional units must we sell to pay for an advertising campaign? b. How much will revenue have to increase before a new investment in plant becomes profitable? c. How much will we have to increase our price to meet a target return of 7.5% assuming sales remain constant? d. Can we stay profitable if we match a competitor s price cut in order to maintain sales volume? e. All of these are questions that can be answered using break even analysis. |
e. All of these are questions that can be answered using break even
analysis. |
|
|
In general, you have more flexibility in setting your prices in the _________ stage of the product life
cycle than in the _________ stage of the product life cycle? a. introductory, maturity b. maturity, introductory c. maturity, growth d. decline, disaster e. growth, introductory |
a. introductory, maturity
|
|
|
Last year, BruceCo sold 1000 coffee cups for $10 each. If the cost for each cup was $4.70, how
much profit did BruceCo make? a. $5,300 b. $4,700 c. $9,995.30 d. $5.30 e. $10,000 |
a. $5,300
|
|
|
_____________ are factors that limit the range of prices a firm may set for its products?
a. pricing constraints b. price heuristics c. price/value continuum d. pricing objectives e. social responsibilities |
a. pricing constraints
|
|
|
For prestige products products that are consumed socially and confer status on their owners?
a. Unit sales of the product can decrease if prices are lowered. b. Demand elasticity is inverted. c. Demand increases when consumer income decreases d. An increase in price will increase unit sales and decrease average revenue. e. Value can be increased by reducing price. |
a. unit sales of the product can decrease if prices are lowered
|
|
|
The __________ to setting prices is based on understanding what customers are already paying
for similar product in the marketplace? a. Demand-based approach b. Cost-based approach c. Competition-based approach d. Survey approach e. Quantitative approach |
c. competition-based approach
|
|
|
The __________ to setting prices weighs consumer tastes and preferences more heavily than
costs and profits. a. Demand-based approach b. Cost-based approach c. Subjective-approach d. Competition based approach e. Qualitative approach |
a. demand-based approach
|
|
|
The ____________ approach to new product pricing sets prices low in order to gain market share
and discourage competitors from entering the market? a. Skimming b. Penetration c. Trial pricing d. Variable price e. new and improved |
b. penetratioin
|
|
|
Which company is likely to change its prices the most frequently?
a. A company that sells collectible dolls over the internet. b. A company that sells collectible dolls through a mail-order catalog c. A company that sells collectible dolls though a store in an upscale mall d. A company that sells collectible dolls through a discount store e. A company that sells collectible dolls in an everything is 99 cents store. |
a. A company that sells collectible dolls over the internet.
|
|
|
The market structure in which companies have the MOST flexibility in setting prices is?
a. Pure monopoly b. Oligopoly c. Monopolistic competition d. Pure competition e. Pure Parcheesi |
a. pure monopoly
|
|
|
The law of demand (which is the basis of the demand curve) says?
a. If prices increase, customers will buy less b. If prices increase, customers will buy more c. If prices increase, customers will buy elsewhere d. If prices increase, customers will spend less e. If prices decrease, customers will spend less |
a. if price increase, consumers will buy less
|
|
|
The Broyhill furniture company designed a sofa that retailers could sell for $699 and still make a
profit. This was because retailers had told the company they needed a promotional sofa that would cost less than the $1000 or more for a typical sofa. They would feature the promotional sofa in their advertisements to bring customers into the store. This is an example of? a. Target profit pricing b. Penetration pricing c. Captive pricing d. Prestige pricing. e. Flexible pricing. |
a. target profit pricing
|
|
|
The ____________ approach to new product pricing sets prices low in order to gain market share
and discourage competitors from entering the market? a. Skimming b. Penetration c. Trial pricing d. Variable price e. new and improved |
b. penetration
|
|
|
For many products such as candy bars, there is a price consumers expect to pay for the product.
Retailers using the _____________ to setting prices will offer the product at a very low price in order to attract customers into their store? a. Customary pricing approach b. Above or below approach c. loss-leader approach d. Price leadership approach e. Price line approach |
c. loss-leader approach
|
|
|
For many products such as candy bars, there is a price consumers expect to pay for the product.
Companies using the _____________ to setting prices will use this price for their products? a. Customary pricing approach b. Above or below approach c. loss-leader approach d. Captive approach e. Price leadership approach |
a. customary pricing approach
|
