Question 1

Which of the following statements about yield management systems (YMS)is true?

Accepted Answer

YMS was first used in the airline industry,but it is now used by automobile manufacturers to make use of underutilized capacity.

Question 2

Which of the following is most likely to be a variable cost for an Internet retailer that sells spices,herbs,and seasonings to consumers?

Accepted Answer

Postage is the only item that varies depending upon the amount of units sold.

Question 3

Mitch owns a pet boarding kennel.The monthly payment on the land he purchased for his kennel,the mortgage on his small office building,and his business license are all examples of _____ costs.

Accepted Answer

Fixed costs do not change as output changes.

Question 4

_____ cost is the change in total costs associated with a one-unit change in output.

Accepted Answer

This is the definition of marginal cost.

Question 5

The greater the number of different uses for a product,the more _____ demand tends to be.

Accepted Answer

If a product has only one use,the quantity purchased probably will not vary as price varies.

Question 6

_____ use complex mathematical software to profitably fill unused capacity.

Accepted Answer

A yield management system (YMS)is a technique for adjusting prices that uses complex mathematical software to profitability fill unused capacity by discounting early purchases,limiting early sales at these discounted prices,and overbooking capacity.

Question 7

Chad has calculated the sales volume at which his lemonade stand's costs equal revenue.Over dinner he announced to his family that he only needed to sell 50 glasses of lemonade at $5 per glass to cover all his costs (lumber and nails for the stand,lemons,sugar,etc.).Which important factor has Chad excluded from his analysis?

Accepted Answer

Chaz's analysis only includes company costs and does not consider consumer demand.

Question 8

If a product has high pricing power this would indicate a situation of:

Accepted Answer

A product with high pricing power is said to have inelastic demand.

Question 9

Allstate has more than 1,500 price levels that are determined by a complex algorithms that analyzes 16 credit report variables,including late payments and card balances.Allstate is using a _____ to set prices.

Accepted Answer

A yield management system is complex mathematical software used to profitably filled unused capacity.

Question 10

Yield management systems are used to:

Accepted Answer

A yield management system (YMS)is a technique for adjusting prices that uses complex mathematical software to profitability fill unused capacity by discounting early purchases,limiting early sales at these discounted prices,and overbooking capacity.

Question 11

The most popular method used by wholesalers and retailers in establishing a sales price is _____ pricing.

Accepted Answer

Markup pricing does not directly analyze the costs of production; rather,is uses the cost of buying the product from the producer,plus amounts for profit and for expenses otherwise not accounted for.

Question 12

Behavioral targeting technology is being used by Internet retailers to offer different prices and promotional offers to different customers based upon their Internet and browsing habits. One potential downside to this practice is:

Accepted Answer

Many activists are encouraging the Federal Trade Commission to set up a federally regulated "Do Not Track" list to make consumer opt-outs easier.

Question 13

Cowboy Malone's Electric City pays a wholesaler $700 for a television and sells it to a customer for $1,500.The markup on the television is:

Accepted Answer

Markup is selling price minus cost: $1,600 - $800 = $800.

Question 14

The two types of costs a marketer needs to consider when setting prices are:

Accepted Answer

A variable cost is a cost that varies with changes in the level of outputs (e.g.,cost of materials),whereas a fixed cost does not change as output is increased or decreased (e.g.,rent).

Question 15

Monthly output at Leisure-Time,Inc.changed from 12 to 13 prefabricated gazebos,and the total costs changed from $9,000 to $10,500.What is the marginal cost for this company?

Accepted Answer

Marginal cost is the change in total costs associated with a one-unit change in output.

Question 16

A cost that changes with the level of output is called a(n)_____ cost.

Accepted Answer

An example of a variable cost is the cost of materials.

Question 17

Central Bark is a dog resort where pets are pampered.Which of the following is the BEST example of one of its fixed costs?

Accepted Answer

The payment on the building remains the same,no matter how many dogs are visit the resort.

Question 18

For a nail salon,the costs associated with the purchase of nail polish and other products like nail polish remover,sterilized equipment,laundry service for the towels,and the beverages given to customers, are all examples of _____ costs.

Accepted Answer

A cost that changes with the level of output is called a variable cost.

Question 19

When a seller determines the selling price by adding to cost an amount for profit and expenses not previously accounted for,the seller is using _____ pricing.

Accepted Answer