Deck 14: Arriving at the Final Price

Question 1

A skimming pricing policy is likely to be most effective when (1) enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable; (2) __________; (3) lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost; and (4) customers interpret the high price as signifying high quality.

A)the high initial price will not attract competitors
B)consumers tend to be price-sensitive
C)it will be easier to set measurable sales unit goals
D)a lower price will significantly reduce unit costs
E)consumers perceive your product to be similar to other products on the market

Answer 1

A

Question 2

When introducing a new or innovative product, setting the highest initial price that customers who really desire the product are willing to pay is referred to as a(n)

A)skimming strategy.
B)penetration strategy.
C)price-lining strategy.
D)experience-curve pricing strategy.
E)prestige pricing strategy.

Answer 2

A

Question 3

Which of the following is the fourth step in setting a final price for a product?

A)set list or quoted price
B)select an approximate price level
C)scan competitors for prices of similar products or services
D)determine cost, volume, and profit relationships
E)identify pricing objectives and constraints

Answer 3

B

Question 4

Determining cost, volume, and profit relationships occurs during __________ of the price-setting process.

A)Step 2
B)Step 3
C)Step 4
D)Step 5
E)Step 6

Question 5

A skimming pricing policy is likely to be most effective when (1) enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable; (2) the high initial price will not attract competitors; (3) __________; and (4) customers interpret the high price as signifying high quality.

A)enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable
B)consumers tend to be price-sensitive
C)it will be easier to set measurable sales unit goals
D)lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost
E)consumers perceive your product to be similar to other products on the market

Question 6

Skimming pricing is a strategy that introduces a new or innovative product by

A)following a price elastic strategy.
B)creating multiple price points.
C)setting a high initial price.
D)setting a low initial price.
E)setting the price at the average of competitors' prices.

Question 7

To accommodate the changes in the book selling market, publishers changed their pricing approach so that

A)rebates could be paid to the bookstores.
B)readers would pay more so that distributors would continue to profit.
C)distributors would no longer get a commission on every e-book sold.
D)distributors would get a commission on every e-book sold.
E)eventually e-books would be free to distribute.

Question 8

With the introduction of e-books, distributors could still set their own retail prices, but with a restriction. Distributors could set prices below a publisher's retail list price so long as they

A)matched the commission received from a publisher.
B)exceeded the commission received from a publisher.
C)did not exceed the commission received from a publisher.
D)did not increase prices to the readers.
E)prevented discounts to competitors.

Question 9

The key to setting a final price for a product is finding an approximate price level to use as a reasonable starting point. Four common approaches to selecting an approximate price level are (1) demand-oriented, (2) cost-oriented, (3) profit-oriented, and (4) __________ approaches.

A)revenue-oriented
B)distribution-oriented
C)stakeholder-oriented
D)competition-oriented
E)cause-oriented

Question 10

Skimming pricing is considered to be a __________ approach to pricing.

A)demand-oriented
B)cost-oriented
C)profit-oriented
D)competition-oriented
E)service-oriented

Question 11

Skimming pricing refers to

A)setting the lowest initial price possible when introducing a new or innovative product in order to "skim" sales from competitors.
B)setting the highest initial price that customers who really desire the product are willing to pay.
C)setting a low initial price on a new product to appeal immediately to the mass market.
D)the practice of replacing promotional allowances with higher manufacturer list prices.
E)setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it.

Question 12

Estimating demand and revenue occurs during __________ of the price-setting process.

A)Step 1
B)Step 2
C)Step 3
D)Step 4
E)Step 5

Question 13

Demand-oriented approaches weigh factors that underlie expected __________ more heavily than such factors as cost, profit, and competition when selecting a price level.

A)total revenue
B)stakeholder concerns
C)prevailing prices
D)product substitutes
E)customer tastes

Question 14

Identifying pricing objectives and constraints occurs during __________ of the price-setting process.

A)Step 1
B)Step 2
C)Step 3
D)Step 4
E)Step 5

Question 15

The key to setting a final price for a product is finding an approximate price level to use as a reasonable starting point. Four common approaches to selecting an approximate price level are (1) demand-oriented, (2) __________, (3) profit-oriented, and (4) competition-oriented approaches.

A)cost-oriented
B)cause-oriented
C)revenue-oriented
D)stakeholder-oriented
E)distribution-oriented

Question 16

Amazon wanted lower retail prices for e-books to

A)lower royalties to authors.
B)eliminate distributors.
C)raise prices overall for printed books.
D)undermine its rival, Nook.
E)build its e-book business.

Question 17

Which of the following statements about the price-setting process is most accurate?

A)When selecting a strategy for setting an initial price, it doesn't matter which one you use as long as you stick with it.
B)Sometimes pricing strategies overlap, and a seasoned marketer will consider several strategies when choosing an approximate price level.
C)Demand-oriented pricing approaches rely heavily on competitors' prices.
D)Skimming pricing is a competition-oriented pricing strategy.
E)Penetration pricing is the best pricing strategy for companies trying to meet the goals of a profit-oriented pricing approach.

Question 18

All of the following are demand-oriented approaches to selecting an approximate price level except

A)odd-even.
B)yield management.
C)customary.
D)bundle.
E)prestige.

Question 19

A skimming pricing policy is likely to be most effective when (1) __________; (2) the high initial price will not attract competitors; (3) lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost; and (4) customers interpret the high price as signifying high quality.

A)consumers tend to be price-sensitive
B)enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable
C)it will be easier to set measurable sales unit goals
D)a lower price will significantly reduce unit costs
E)consumers perceive your product to be similar to other products in the market

Question 20

The key to setting a price for a product is finding an approximate price level to use as a reasonable starting point. Four common approaches to selecting an approximate price level are (1) demand-oriented, (2) cost-oriented, (3) __________, and (4) competition-oriented approaches.

A)stakeholder-oriented
B)revenue-oriented
C)profit-oriented
D)distribution-oriented
E)cause-oriented

Question 21

Penetration pricing is intended to appeal to which market?

A)highly selective, quality-seeking consumers
B)price-insensitive markets
C)specialty product markets
D)the same markets as those targeted with a skimming pricing strategy
E)the mass market

Question 22

A skimming pricing policy is likely to be most effective when

A)consumers perceive one product to be similar to other products on the market.
B)a lower price will significantly lower fixed costs.
C)competitors will be attracted to the market due to the potential for high sales revenues.
D)consumers tend to be price-sensitive.
E)the high initial price will not attract competitors.

Question 23

A penetration pricing policy is most likely to be effective when (1) __________; (2) a low initial price discourages competitors from entering the market; and (3) unit production and marketing costs fall dramatically as production volumes increase.

A)lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost
B)the high initial price will not attract competitors
C)customers interpret the high price as signifying high quality
D)enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable
E)many segments of the market are price-sensitive

Question 24

Which of the following statements about penetration pricing is most accurate?

A)Penetration pricing is a profit-oriented approach to pricing.
B)Penetration pricing is a cost-oriented pricing method.
C)Penetration pricing encourages competitors to enter a market.
D)Penetration pricing is more effective in a marketplace with price-sensitive consumers.
E)Penetration pricing usually precedes a skimming pricing.

Question 25

A penetration pricing policy is most likely to be effective when (1) many segments of the market are price-sensitive; (2) __________; and (3) unit production and marketing costs fall dramatically as production volumes increase.

A)lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost
B)the high initial price will not attract competitors
C)customers interpret the high price as signifying high quality
D)a low initial price discourages competitors from entering the market
E)enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable

Question 26

A skimming pricing policy is likely to be most effective when

A)consumers tend to be price-sensitive.
B)it will be easier to set measurable sales unit goals.
C)a lower price will significantly lower fixed costs.
D)consumers perceive your product to be similar to other products on the market.
E)customers are willing to buy immediately at the high initial price.

Question 27

Penetration pricing refers to

A)charging different prices to different buyers for goods of like grade and quality.
B)setting the highest initial price that customers really desiring the product are willing to pay.
C)setting a low initial price on a new product to appeal immediately to the mass market.
D)setting a market price for a product or product class based on a subjective feel for the competitors' prices or market price.
E)setting prices a few dollars or cents under an even number.

Question 28

A penetration pricing policy is most likely to be effective when

A)lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost.
B)many segments of the market are price-sensitive.
C)the high initial price will not attract competitors.
D)customers interpret the high price as signifying high quality.
E)enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable.

Question 29

A skimming pricing policy is likely to be most effective when

A)lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost.
B)consumers tend to be price-sensitive.
C)it is easier to set measurable sales unit goals.
D)a lower price will significantly lower fixed costs.
E)consumers perceive your product to be similar to other products on the market.

Question 30

Penetration pricing is considered to be a __________ approach to pricing.

A)demand-oriented
B)cost-oriented
C)profit-oriented
D)competition-oriented
E)service-oriented

Question 31

The first Apple iPhone was introduced in 2007 at an initial price of $600. People waited in line overnight so they could be one of the first to own this unique smartphone. Which pricing strategy did Apple use to help recoup its costs for developing the smartphone?

A)penetration pricing
B)experience curve pricing
C)customary pricing
D)skimming pricing
E)target pricing

Question 32

A penetration pricing policy is most likely to be effective when (1) many segments of the market are price-sensitive; (2) a low initial price discourages competitors from entering the market; and (3) _________.

A)unit production and marketing costs fall dramatically as production volumes increase
B)enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable
C)lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost
D)the high initial price will not attract competitors
E)customers interpret the high price as signifying high quality

Question 33

A penetration pricing policy is most likely to be effective when

A)lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost.
B)the high initial price will not attract competitors.
C)a low initial price discourages competitors from entering the market.
D)customers interpret the high price as signifying high quality.
E)enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable.

Question 34

When microwave ovens were in the introduction stage of their product life cycle, some consumers were willing to pay exorbitant prices for these innovative ovens. Taking advantage of this strong consumer desire, marketers set the price for microwave ovens at the highest initial price possible. Marketers of microwave ovens used a __________ pricing strategy.

A)skimming
B)penetration
C)prestige
D)price lining
E)bundle

Question 35

A manufacturer of a digital video recorder (DVR) is thinking of using a skimming pricing strategy for its new product. Which of the following conditions would argue against using a skimming pricing strategy for the DVR?

A)large potential market, even at a high price
B)technological problems still exist for competitors
C)increasing volume reduces production costs substantially
D)consumers perceive a price-quality relationship
E)consumers are innovators

Question 36

The first Apple iPad was introduced in 2010 at an initial price of $650 for the 16 GB version. People waited in line overnight so they could be one of the first to own this unique tablet device. Which pricing strategy did Apple use to help recoup its costs for developing the iPad?

A)price lining
B)penetration pricing
C)skimming pricing
D)customary pricing
E)target pricing

Question 37

Hallmark was the official supplier of flowers at the last Winter Olympics. Hallmark presented each Olympic winner with a special bouquet of roses designed to resemble the Olympic torch. Consumers were able to buy a smaller version of this same bouquet at the Hallmark website for $74.95. The Olympic bouquet that consumers could buy contained two dozen yellow roses, yet you could buy the same two dozen yellow roses for less than $35 at most supermarkets. If Hallmark is treating the Olympic bouquet as an innovative product, then it is using which demand-oriented pricing approach?

A)bundle pricing
B)yield management pricing
C)skimming pricing
D)target return-on-sales pricing
E)penetration pricing

Question 38

The pricing strategy that is almost the exact opposite of skimming pricing is

A)target pricing.
B)penetration pricing.
C)price lining.
D)odd-even pricing.
E)prestige pricing.

Question 39

A skimming pricing policy is likely to be most effective when

A)consumers perceive your product to be similar to other products on the market.
B)a lower price will significantly lower fixed costs.
C)customers interpret the high price as signifying high quality.
D)consumers tend to be price-sensitive.
E)it is easier to set measurable sales unit goals.

Question 40

A skimming pricing policy is likely to be most effective when (1) enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable; (2) the high initial price will not attract competitors; (3) lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost; and (4) __________.

A)enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable
B)consumers tend to be price-sensitive
C)customers interpret the high price as signifying high quality
D)lowering the price has a major effect on increasing the sales volume
E)consumers perceive your product to be similar to other products on the market

Question 41

Setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it is referred to as

A)skimming pricing.
B)status pricing.
C)price lining.
D)value pricing.
E)prestige pricing.

Question 42

Price lining is considered to be a __________ approach to pricing.

A)cost-oriented
B)demand-oriented
C)profit-oriented
D)competition-oriented
E)service-oriented

Question 43

Price lining refers to

A)charging different prices to different buyers for goods of like grade and quality.
B)setting a low initial price on a new product to appeal immediately to the mass market.
C)setting a market price for a product or product class based on a subjective feel for the competitors' price or market price as the benchmark.
D)setting prices a few dollars or cents under an even number.
E)setting the price of a line of products at a number of different specific pricing points.

Question 44

Prestige pricing refers to

A)charging different prices to different buyers for goods of like grade and quality.
B)setting a low initial price on a new product to appeal immediately to the mass market odd-even pricing.
C)setting a market price for a product or product class based on a subjective feel for the competitors' price or market price.
D)setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it.
E)setting a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors.

Question 45

Setting the price of a line of products at a number of different specific price points is referred to as

A)odd-even pricing.
B)bundle pricing.
C)cost-plus pricing.
D)price lining.
E)prestige pricing.

Question 46

In some cases, penetration pricing may follow skimming pricing. The skimming pricing would help __________ and the penetration pricing would help __________.

A)increase market share; attract price-insensitive customers
B)attract price-sensitive customers; increase market share
C)recoup initial research and development costs; increase market share
D)recoup initial research and development costs; improve firm reputation
E)increase market share; attract price insensitive customers

Question 47

When Amazon introduced the Kindle Fire tablet device at $199 while Apple was selling the lowest price iPad for $499, Amazon was using a __________ pricing strategy.

A)skimming
B)price lining
C)BOGO
D)penetration
E)loss-leader

Question 48

A Patek Philippe Sky Moon Tourbillion men's wristwatch is among the most expensive in the world, costing more than $1.5 million in 2013. This is an example of a __________ strategy.

A)penetration pricing
B)target pricing
C)bundle pricing
D)loss-leader pricing
E)prestige pricing

Question 49

When using a price lining strategy, a marketer will

A)set the price of a line of products at a number of different specific pricing points.
B)set the price slightly higher than necessary to protect against losses resulting from adverse environmental forces.
C)adjust the price of a product so it is "in line" with the price of its largest competitor.
D)set a low initial price on a new product to appeal immediately to the mass market.
E)set a market price for a product or product class based on a subjective feel for the competitors' price or market price as the benchmark.

Question 50

In response to Duracell's introduction of the Duracell Ultra battery, Energizer introduced an Advanced Formula battery. But unlike Duracell, Energizer priced its battery at a low initial price to attract the mass market. Was Energizer's pricing strategy to take market share from Duracell a success?

A)No, because consumers are price-insensitive when it comes to batteries.
B)Yes, because of the positive association with the "Energizer Bunny" marketing campaign.
C)No, because consumers were unable to perceive the improved quality due to the low price.
D)Yes, because consumers typically respond positively to cost-plus pricing.
E)Yes, because the demand for batteries has unitary elasticity.

Question 51

Wrigley recently introduced a new flavor of Orbit brand sugar-free chewing gum-mint mojito. The introductory price was low so that it quickly created loyal customers for the flavor. In this example, Wrigley used

A)skimming pricing.
B)penetration pricing.
C)price lining.
D)odd-even pricing.
E)loss-leader pricing.

Question 52

When the Swiss watchmaker TAG Heuer raised the average price of its watches from $250 to $1,000, its sales volume jumped sevenfold. The likely cause of this volume increase is

A)because the watch market is highly conservative.
B)because economies of scale in production would be substantial.
C)because retailers are not willing to carry new brands of watches in this category.
D)because once the initial price is set, it is nearly impossible to lower the price without alienating early buyers.
E)because watches in this category have an element of prestige pricing, so that lower prices may result in lower sales.

Question 53

In response to Duracell's introduction of the Duracell Ultra battery, Energizer introduced an Advanced Formula battery. But unlike Duracell, Energizer priced its batteries at a low initial price to attract the mass market. In this case, Energizer used

A)penetration pricing.
B)prestige pricing.
C)skimming pricing.
D)price lining.
E)cost-plus fixed-fee pricing.

Question 54

A manufacturer using __________ is setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it.

A)skimming pricing
B)penetration pricing
C)price lining
D)odd-even pricing
E)prestige pricing

Question 55

Talbots sells women's clothes. A long-sleeved scoopneck T-shirt with the Talbots label costs $45. By comparison, you can buy a T-shirt for $5 at a Family Dollar Store, but it won't have the prestigious Talbots label or quality. What kind of demand-oriented approach to pricing does Talbots use?

A)experience curve pricing
B)skimming pricing
C)demand-backward pricing
D)prestige pricing
E)flexible pricing

Question 56

In some cases, penetration pricing may follow which pricing strategy?

A)experience curve
B)target ROI
C)odd-even
D)above market
E)skimming

Question 57

When Hallmark cards introduced a line of 99-cent cards (about half the price of the previously least expensive cards it sold), the greeting card company was trying to appeal to a mass market that was price-sensitive. Hallmark was using a(n) __________ pricing strategy.

A)prestige
B)skimming
C)target ROI
D)penetration
E)experience-curve

Question 58

A penetration pricing policy is most likely to be effective when

A)unit production and marketing costs fall dramatically as production volumes increase.
B)enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable.
C)lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost.
D)the high initial price will not attract competitors.
E)customers interpret the high price as signifying high quality.

Question 59

You can buy a General Electric dishwasher for $399 or you can buy a similar Bosch brand dishwasher for $989. Since Bosch uses its pricing strategy to project a high-quality product image, it is most likely using __________ pricing.

A)bundle
B)standard markup
C)prestige
D)penetration
E)cost plus fixed-fee

Question 60

Prestige pricing is considered to be a __________ approach to pricing.

A)demand-oriented
B)cost-oriented
C)profit-oriented
D)competition-oriented
E)service-oriented

Question 61

Bundle pricing is considered to be a __________ pricing practice.

A)demand-oriented
B)cost-oriented
C)profit-oriented
D)competition-oriented
E)product line-oriented

Question 62

Odd-even pricing is considered to be a __________ approach to pricing.

A)cost-oriented
B)profit-oriented
C)demand-oriented
D)competition-oriented
E)service-oriented

Question 63

Odd-even pricing refers to

A)setting prices one way for product lines and another way for individual brands.
B)setting prices of luxury items at even price points and setting the price of necessities at odd price points.
C)setting prices a few dollars or cents under an odd number.
D)adding a fixed percentage to the cost of all items in a specific product class.
E)setting prices a few dollars or cents under an even number.

Question 64

A retailer purchased a gross (144) of silk shells each costing exactly $17. Although the only difference between the shells was color, when they were put on the floor, the primary colors were marked $25, the pastel colors were marked $28, and the black and white shells were marked $30. These prices were set most likely because

A)retailers using a price lining strategy will occasionally mark up items based on color, style, and expected consumer demand.
B)fewer people buy black and white shells, so the retailer has to charge a higher price to break even.
C)the retailer is using prestige pricing; black and white shells are more elegant.
D)the primary colors were priced using a penetration strategy, the pastels were priced using a skimming strategy, and the black and white shells were priced using prestige pricing.
E)price lining is essentially the same as above-, at-, or below market pricing.

Question 65

Target pricing refers to

A)a method of selecting specific prices wholesalers and retailers are willing to pay based upon the elasticity of each given item.
B)a method of charging different prices to maximize revenue for a set amount of capacity at any given time.
C)the practice of simultaneously increasing product and service benefits while maintaining or decreasing price.
D)a method of estimating the price that ultimate consumers would be willing to pay for a product, then working backward through markups taken by retailers and wholesalers to determine what price to charge wholesalers.
E)a method of estimating the price that ultimate consumers would be willing to pay for a product, then determining how much wholesalers wish to charge its customers, deliberately adjusting the composition and features of the product to achieve the price to consumers.

Question 66

Target pricing is considered to be a __________ approach to pricing.

A)cost-oriented
B)profit-oriented
C)demand-oriented
D)competition-oriented
E)service-oriented

Question 67

To be successful, odd-even pricing depends on

A)a retailers' ranges of prices.
B)the wholesalers' markups.
C)a manufacturer's costs.
D)competitors' price assumptions.
E)customers' perceptions of price.

Question 68

Setting prices a few dollars or cents under an even number is referred to as

A)odd-even pricing.
B)prestige pricing.
C)price lining.
D)above-, at-, or below-market pricing.
E)every day fair pricing.

Question 69

The assumption that demand is elastic at a number of price points but is inelastic between these price points leads to which pricing approach?

A)product-line pricing
B)skimming pricing
C)penetration pricing
D)price lining
E)odd-even pricing

Question 70

Odd-even pricing is based on

A)retailers' perceptions of price.
B)customers' perceptions of price.
C)wholesalers' markups.
D)manufacturers' perceptions of price.
E)government regulators' perceptions of price.

Question 71

Which of the following is a demand-oriented approach to pricing?

A)customary pricing
B)target profit pricing
C)standard markup pricing
D)bundle pricing
E)service-oriented pricing

Question 72

The pricing approach that (1) estimates the price that ultimate consumers would be willing to pay for a product; (2) works backward through markups taken by retailers and wholesalers to determine what price to charge wholesalers; and (3) results in the manufacturer deliberately adjusting the composition and features of the product to achieve the price to consumers is referred to as

A)cost-benefit pricing.
B)cost-plus percentage-of-cost pricing.
C)target pricing.
D)cost-plus fixed-fee pricing.
E)product feature pricing.

Question 73

Which of the following pricing techniques is most sensitive to customers' responses to price?

A)cost-plus percentage-of-cost pricing
B)target pricing
C)experience curve pricing
D)cost-plus fixed-fee pricing
E)standard markup pricing

Question 74

Odd-even pricing is most closely related to

A)retailers' perceptions of price.
B)customers' perceptions of price.
C)wholesalers' markups.
D)a manufacturer's costs.
E)competitors' perceptions of price.

Question 75

In some cases, manufacturers design products for different price points and retailers apply __________ to achieve the three or four different price points offered to consumers.

A)progressively higher markup percentages
B)different markup percentages depending on how long the item remains on their shelves
C)above-, at-, or below-market pricing
D)approximately the same markup percentages
E)elasticity of demand pricing calculations

Question 76

The prices for all furniture sold at American Furniture Warehouse end in $9.99, such as $599.99, $899.99, etc. American Furniture Warehouse uses

A)odd-even pricing.
B)dynamic pricing.
C)price lining.
D)bundle pricing.
E)product-line pricing.

Question 77

The Swedish manufacturer of Asko dishwashers concluded that consumers would be willing to pay approximately $989 for a dishwasher that was quieter than any other dishwasher on the market. Based on this price, Asko determined the margins that would have to be given to wholesalers and retailers to arrive at the $989 retail price. Asko used

A)prestige pricing.
B)price lining.
C)cost-plus pricing.
D)target pricing.
E)customary pricing.

Question 78

Which of the following pricing techniques results in the manufacturers deliberately adjusting the composition and features of a product to achieve the desired price for consumers?

A)cost-plus percentage-of-cost pricing
B)standard markup pricing
C)cost-plus fixed-fee pricing
D)experience curve pricing
E)target pricing

Question 79

Which of the following statements regarding price lining is most accurate?

A)In order for price lining to be effective, there should be at least five specified price points.
B)Price lining assumes that demand is inelastic at each price point but elastic between price points.
C)Price lining assumes that demand is elastic at each price point but inelastic between price points.
D)Price lining is the preferred pricing strategy for governmental contracts.
E)Price lining is the same as above-, at-, or below-market pricing.

Question 80

Which of the following statements regarding odd-even pricing is most accurate?

A)Odd-even pricing is designed to give the consumer a better set of pricing alternatives.
B)Odd-even pricing can be used in conjunction with a skimming pricing strategy, but should not be used with a penetration pricing strategy.
C)Odd-even pricing does not work if the product is health care-related.
D)Overuse of odd-ending prices tends to mute its effect on demand.
E)Odd-ending prices are best used with large ticket items; it loses its effectiveness with moderate- to low-ticket items.