Question 1

To determine the break- even point,a firm needs to first do which of the following?

Accepted Answer

To determine the break-even point, a firm needs to calculate the contribution per unit, which is the selling price per unit minus the variable cost per unit. This helps in understanding how many units need to be sold to cover fixed costs.

Question 2

With the flexibility to adjust prices on a wide range of goods based on demand that the Internet offers,some companies are reversing the fixed pricing trend and using .

Accepted Answer

Dynamic pricing is a strategy where prices are adjusted in real-time based on demand, competition, and other factors, which is facilitated by the Internet.

Question 3

From a marketer's point of view,price lining is a way to do which of the following?

Accepted Answer

Price lining is a strategy where a business sets a limited number of prices for a range of products, which helps in maximizing profits by simplifying consumer choices and encouraging them to purchase higher-priced items.

Question 4

According to the law of demand,which of the following is true?

Accepted Answer

The law of demand states that, all else being equal, as the price of a product decreases, the quantity demanded by consumers increases.

Question 5

In a market with ,the market consists of many buyers and a few sellers who are highly sensitive to each other's pricing and typically use very similar pricing.

Accepted Answer

In an oligopolistic competition, the market consists of a few sellers who are highly sensitive to each other's pricing and typically use very similar pricing strategies.

Question 6

A(n)occurs when customers decide that two different brands of pain reliever have the same product quality because they have basically the same product characteristics and similar prices.

Accepted Answer

The assimilation effect occurs when consumers perceive similar products as being of the same quality due to similar characteristics and pricing, leading them to group the products together in their minds.

Question 7

When Joe's Coffee Nook raised the price of a latte,Joe noticed a substantial change in how many lattes he sold daily.A price reduction caused his sales to increase.From this information,you can assume the demand for lattes is .

Accepted Answer

The demand for lattes is elastic because a change in price leads to a significant change in the quantity demanded.

Question 8

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

Accepted Answer

In an open auction, all participants are aware of the highest bid at any given time, allowing them to adjust their bids accordingly.

Question 9

When a ski and snowboarding shop offers a price reduction to customers who buy during off- peak periods throughout the year,the firm is giving a(n)_ discount.

Accepted Answer

The discount offered during off-peak periods is a seasonal discount, as it is related to the time of year when demand is lower.

Question 10

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

Accepted Answer

These are all examples of fixed costs, which do not change with the level of production.

Question 11

The break- even point is the point at which .

Accepted Answer

The break-even point is where total revenue equals total costs, meaning the business is not making a profit or a loss.

Question 12

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

The demand for the cholesterol drug is inelastic because the quantity demanded does not change significantly with a change in price, due to the lack of substitutes and the necessity of the drug for health.

Question 13

lets marketers look at cost and demand at the same time and identifies the output and the price that will generate the maximum profit.

Accepted Answer

Marginal analysis helps marketers evaluate the cost and demand simultaneously to determine the output and price that will maximize profit.

Question 14

As a result of the ,Rick decided the candy priced at $2.50 per pound could not be nearly as good as the candy priced at $9.50 per pound.

Accepted Answer

The contrast effect occurs when the perception of a product is influenced by the comparison with another product, leading Rick to believe the more expensive candy is better.

Question 15

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

Accepted Answer

Trade or functional discounts are offered to channel intermediaries, such as wholesalers or retailers, who perform certain functions or tasks for the manufacturer, like storage, sales, or distribution, which the manufacturer would otherwise have to handle.

Question 16

Which of the following is an example of a pricing strategy that focuses on customers' needs?

Accepted Answer

Everyday low pricing is a strategy that focuses on providing consistent low prices to meet customer needs and expectations for value.

Question 17

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

Accepted Answer

Predatory pricing involves setting a low price to eliminate competition, intending to raise prices once competitors are driven out.

Question 18

Whether a firm sells to businesses or directly to consumers,most pricing structures are built around which of the following?

Accepted Answer

List prices form the basis of most pricing structures, as they represent the initial price set by the firm before any discounts or promotions are applied.

Question 19

The most common cost- based approach to pricing is .

Accepted Answer

Cost-plus pricing is the most common cost-based approach, where a fixed percentage is added to the cost of producing a product to determine its selling price.

Question 20

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

Accepted Answer

Elasticity is a measure of how demand changes with price changes, not a pricing objective.

Quiz 11: Pricing the Product