Question 1

Due to rapidly rising overhead costs and increases in raw material prices,Framarx Corporation was forced to raise the price of its waxed and coated paper by 35 percent.(The paper is used between frozen hamburger patties to keep the patties from freezing together.)Framarx is the leading manufacturer in this industry,and its competitors will follow suit.While the sales force for Framarx believes the price increase will result in a drop in sales,its marketing manager disagrees because the demand for the waxed and coated paper is more than likely:

Accepted Answer

A good is price inelastic if a change in price causes little or no change in demand.Paper used between hamburger patties is a fairly insignificant cost item in the production of hamburger and might even be considered a necessity item.

Question 2

The demand for consumer goods often affects the demand for business products.This characteristic of business markets is called _____ demand.

Accepted Answer

The demand for business products is called derived demand because organizations buy products to be used in producing their customers' products.

Question 3

The distribution structure in business marketing typically:

Accepted Answer

Direct channels,where manufacturers market directly to users,are much more common in business markets than in consumer markets.

Question 4

Inland Eastex manufactures a heavy paper stock that is used for printing covers for many different types and sizes of consumer magazines.Consumer magazine sales determine how much paper Inland Eastex sells.This is an example of:

Accepted Answer

Derived demand for a business product comes from the original consumer demand.

Question 5

All of the following are demand characteristics of business markets EXCEPT:

Accepted Answer

Business markets are characterized by derived demand,inelastic demand,joint demand,and fluctuating demand.

Question 6

Lanover Manufacturing supplies windshield wiper blades to General Motors and Ford.A sudden jump in the price of rubber and its substitutes has forced Lanover and other wiper blades manufacturers to double the price of the wiper blades.This increase in price has not affected sales volume for wiper blades.The price change did not change demand for windshield wiper blades because demand for this product by business customers is:

Accepted Answer

A change in price has not really made a change in quantity demanded; therefore,the good is price inelastic.

Question 7

Bàbolina Tetra is a Hungarian company that has genetically created a chicken that is guaranteed to produce uniform brown eggs with strong shells.It breeds and sells young chicks to farmers all over Europe who want to sell eggs in local markets.When consumers began to worry about cholesterol content and stopped eating as many eggs,the demand for the Tetra hen also declined.This would be an example of _____ demand.

Accepted Answer

Demand for hens is derived from consumers' demands for eggs,which has declined.

Question 8

When demand for a product is _____,an increase or decrease in the price of the product will not significantly affect demand for the product.

Accepted Answer

This is the definition of inelastic demand.

Question 9

Apple iTunes has sold over five billion downloads.Without iTunes the demand for the Apple iPod line of products would be small.Without the musicians there would be no iTunes.A condition of _____ demand exists.

Accepted Answer

Joint demand occurs when two or more items are used together in a final product.

Question 10

During the first years of this century,the number of packages arriving at households has more than doubled.An increase in the price of the cardboard boxes in which these packages are shipped will have little effect on the amount of shipping done; the demand for the boxes will continue to increase.Therefore,you know the demand for the cardboard boxes is:

Accepted Answer

A product is price inelastic if a change in price causes little or no change in demand.Boxes are a fairly insignificant cost item in the overall costs of a product and might even be considered a necessity item.

Question 11

A decline in the availability of bicycle handle bars will decrease Huffy Bicycle Company's production of bicycles.Decreased production in turn reduces Huffy's demand for bicycle seats.This is because the products in this situation have _____ demand.

Accepted Answer

When two or more items are used in combination in the final product,they have a joint demand.

Question 12

When the demand for packaged beer fell by 8 percent in one year,the demand for aluminum beer cans and glass beer bottles fell also because the demand for beer containers is an example of a(n)_____ demand.

Accepted Answer

The demand for beer containers is driven by the consumer demand for beer; therefore,the containers have a derived demand.

Question 13

Buyers in the business market tend to _____ than buyers in the consumer market.

Accepted Answer

Over one-half of all U.S.business consumers are concentrated in just seven of the fifty states.

Question 14

Although the price of a chemical added to paint to protect surfaces from mold and mildew has almost doubled,the price of paint only rose an average of 5 percent,and the demand for both paint and the chemical that eliminates mold and mildew remained stable.The demand for this chemical is:

Accepted Answer

A good is price inelastic if a change in price leads to a small change in quantity demanded or does not significantly affect demand for the product.

Question 15

Managers can use the NAICS data to:

Accepted Answer

NAICS data,when compared from year to year,can pinpoint which industries are growing and,hopefully,identify market opportunities.

Question 16

An acute shortage of heavy-duty tires is threatening to disrupt operations in mining and construction sites around the world.According to one mine operator,"I've got the coal and market,and I have the trucks to haul the coal,but I don't have the tires.I'd be willing to pay double the price if I could get the tires I need." The demand for heavy-duty tires is:

Accepted Answer

When demand for a product is inelastic,an increase or decrease in the price of the product will not significantly affect demand for the product.

Question 17

As a result of the _____,a small increase or decrease in consumer demand can produce a much larger change in demand for the facilities and equipment needed to manufacture the consumer product.

Accepted Answer

The multiplier effect (accelerator principle)is a phenomenon in which a small increase or decrease in consumer demand can produce a much larger change in demand for the facilities and equipment needed to make the consumer product.

Question 18

When two or more items are used in combination to produce a final product,they are said to have _____ demand.

Accepted Answer

This is the definition of joint demand.

Question 19

Jif is the best-selling brand of peanut butter in the country.The manufacturer purchases large quantities of peanuts every year to manufacturer its product.This order size is an example of _____ and would give Jif an advantage over other buyers of peanuts.

Accepted Answer

Business buyers buy in much larger quantities than consumers.

Question 20

Electric cars will increase the demand for electricity,which will then dramatically increase demand for the equipment needed to provide consumers with the electricity.This dramatic increase is due to the:

Accepted Answer

Increased consumer demand leading to a larger increase in demand for manufacturing equipment to make the consumer product is known as the multiplier effect of demand or as the accelerator principle.

Quiz 7: Business Marketing