Deck 16: Pricing Strategies: Basic Decisions

Question 1

A product cannot exist without a price

Answer 1

True

Question 2

The demand-supply model of pricing works best with commodities under a monopoly situation

Answer 2

True

Question 3

The relationship between supply and price is weakened in the case of differentiated products

Answer 3

True

Question 4

A company has more pricing flexibility and control when its offering is viewed by consumers as a product rather than as a commodity

Question 5

It takes more than one company to start a price war

Question 6

In the case of expensive, chic products, their prices should be lowered in countries with low per-capita income

Question 7

A seller should bill in a weak currency

Question 8

A buyer should try to gain acceptance in a strong currency

Question 9

A country's trade gap is affected less by the value change of its currency than by the relationship between import prices and prices for domestically produced competitive goods

Question 10

A bundling strategy is superior to an unbundling strategy

Question 11

To file an antidumping petition, a US firm must provide information regarding material injury

Question 12

The United States can impose antidumping duties when a foreign product is sold in the United States at less than fair value and when it injures US industries

Question 13

The US government considers dumping to be illegal and will imposed anti-dumping duties if foreign goods are sold at less than fair value and if non-US firms are injured

Question 14

Antidumping measures have been used for protection purposes

Question 15

Antidumping, as currently practiced by the United States, is anticompetitive

Question 16

Product/brand modification can be used to legally overcome dumping laws

Question 17

New packaging can be used to circumvent price controls

Question 18

A marketer operating in a country experiencing high inflation should use the LIFO (last in-first out) accounting method instead of the FIFO (first in-first out) method

Question 19

A marketer operating in a highly inflationary environment should collect its accounts receivable slowly

Question 20

Intra-firm trading of goods and services among multinational corporations is a negligible percentage of total world trade

Question 21

A parent firm should maximize its income in low tax countries and minimize profit in high tax markets

Question 22

If a buying subsidiary is located in a low-tax country, its income should be minimized

Question 23

The United States requires arm's length dealing between related parties

Question 24

The OECD does not have published guidelines on transfer pricing

Question 25

Corporate income tax law in OECD countries requires multinational firms to set their transfer prices according to the arm's length standard