Question 1

Shopping bots allow sellers to collect detailed data about customers' buying habits, preferences, and even spending limits.

Accepted Answer

False

Question 2

Prices always steadily decline for a product in the decline stage of the product life cycle.

Accepted Answer

When only one firm is left in the market,prices begin to stabilize,but they may eventually rise dramatically if the product survives and moves into the specialty goods category,as horse-drawn carriages and vinyl records have.

Question 3

Extranets enable buyers to quickly and easily compare products and prices, putting them in a better bargaining position.

Accepted Answer

Extranets provide buyers with access to a wider range of suppliers and their products, allowing for easier comparison of prices and features. This increased transparency can give buyers more negotiating power when making purchasing decisions.

Question 4

Digital pricing has better equipped brick-and-mortar stores to compete with their online alternatives.

Accepted Answer

Digital pricing has enabled brick-and-mortar stores to easily adjust their prices to remain competitive with online stores, which often have lower overhead costs. This has helped to level the playing field and give brick-and-mortar stores a fighting chance in the digital age.

Question 5

For businesses, consumer penalties are part of doing business in a highly competitive marketplace.

Accepted Answer

Consumer penalties, such as bad reviews and negative word-of-mouth, can affect a business's reputation and bottom line. In a competitive marketplace, businesses must navigate how to avoid or mitigate these penalties while still delivering goods and services to their customers.

Question 6

Because of its recent high growth in the national market, Mable Inc., an online cosmetics retailer, decides to divide its market in the United States into segments and charge a flat freight rate to all customers in a given segment. In this scenario, Mable Inc. plans to adopt freight absorption pricing.

Accepted Answer

Freight absorption pricing involves the seller absorbing some or all of the freight costs to offer a competitive price, not charging a flat rate to customers in a segment.

Question 7

An effective distribution network can overcome minor flaws in the marketing mix.

Accepted Answer

An effective distribution network can ensure that the product reaches the intended audience and can compensate for any minor issues in the other elements of the marketing mix.

Question 8

Psychological pricing is marketing two or more products in a single package for a special price.

Accepted Answer

The answer of Psychological pricing is marketing two or more...

Question 9

A rebate is a discount to wholesalers and retailers for performing channel functions.

Accepted Answer

The answer of A rebate is a discount to wholesalers...

Question 10

When a seller establishes a series of prices for a type of merchandise, a purchase agreement is violated.

Accepted Answer

Establishing a series of prices for a type of merchandise is a common business practice and does not violate a purchase agreement.

Question 11

Predatory pricing is illegal under the Robinson-Patman Act of 1936.

Accepted Answer

The answer of Predatory pricing is illegal under the Robinson-Patman...

Question 12

Yield management systems encourage airline companies to ignore the importance of demand and decide to price their products largely or solely on the basis of costs.

Accepted Answer

Yield management systems are designed to consider the importance of demand and adjust price based on it to optimize revenue. Therefore, airlines do not solely rely on costs to determine their pricing decisions.

Question 13

www.ebay.com is the most popular extranet in the United States.

Accepted Answer

The answer of www.ebay.com is the most popular extranet in...

Question 14

According to garment makers, the demands of large customers are nearly wiping out profits for all but the very large suppliers.

Accepted Answer

According to the statement, the demands of large customers are causing profits to be wiped out for all but the very large suppliers, indicating that the statement is true.

Question 15

As products enter the growth stage of the product life cycle, prices generally begin to stabilize.

Accepted Answer

Generally, as products enter the growth stage, there is increased demand and competition, which can lead to stable prices. However, in some cases, companies may choose to lower prices to gain market share or increase profits through economies of scale. Overall, the trend is towards price stability in the growth stage.

Question 16

Product life cycles can only be measured in years.

Accepted Answer

Product life cycles can vary in length and can range from months to decades, depending on the product and industry.

Question 17

Unlike a firm that launches a new item resembling several others already on the market, a firm that introduces a totally new product with no close substitutes will have no pricing freedom.

Accepted Answer

A firm that introduces a totally new product with no close substitutes has pricing freedom because there is no existing competition to set an established price point. The firm can set a higher price to reflect the unique qualities and benefits of the new product.

Question 18

Price promotion alone always creates a low price image.

Accepted Answer

The answer of Price promotion alone always creates a low...

Question 19

A firm can charge different prices to different customers if the prices represent manufacturing or quantity discount savings.

Accepted Answer

A firm can offer discounted prices based on manufacturing or quantity savings, and these discounted prices can vary among different customers. However, price discrimination based on other factors such as race, gender, or religion is illegal.

Question 20

To prove predatory pricing, the predator must show that it explicitly tried to ruin a competitor and that the predatory price was below its average variable cost.

Accepted Answer

To prove predatory pricing, the plaintiff (not the predator) must show that the predator engaged in pricing that was below its average variable cost and that it had a reasonable chance of recouping its losses in the future. There is no requirement for the predator to explicitly try to ruin a competitor, although such behavior may be evidence of predatory intent.

Quiz 19: Pricing Concepts