Question 1

is an assessment of what the customer gets compared with what the customer gives up.
A) Market research
B) Value
C) Price
D) Auction

Accepted Answer

Value is an assessment of what the customer gets in exchange for what they give up, whether that be money, time, or some other resource. Price is simply the amount of money the customer must pay for the product or service, but value takes into account all of the benefits the customer receives in return. Market research involves gathering data about the target market, and an auction is a competitive bidding process to determine the price of a product or service.

Question 2

If the inner/middle pricing choice between two extremes looks particularly attractive, we call this the .
A) reference
B) median
C) compromise
D) average

Accepted Answer

The term used for the inner/middle pricing choice between two extremes that looks particularly attractive is the compromise. This is because it involves finding a balance between the higher and lower options, resulting in a mutually agreeable choice. Therefore, the correct answer is C.

Question 3

The idea that price is actually negotiated between the buyer and seller refers to which of the following terms?
A) fixed pricing
B) sensitivity pricing
C) dynamic pricing
D) none of these

Accepted Answer

The idea that price is negotiated between the buyer and seller is referred to as dynamic pricing. This means that the price is not fixed, but rather varies based on the negotiations between the two parties. Sensitivity pricing refers to the practice of setting prices based on how sensitive customers are to changes in price, while fixed pricing means that the price does not change regardless of customer demand or negotiation.

Question 4

Customers are shown products with various combinations of features and attributes, with price being one of them. The customers are asked, "Which combination do you prefer most?," and then, "Next most?" etc. What type of study is being done?
A) meta-analysis
B) scanner survey
C) price survey
D) conjoint analysis

Accepted Answer

This is a conjoint analysis, which involves presenting customers with different combinations of features and attributes and asking them to indicate their preferred options. The results can then be used to determine which features and attributes are most important to customers and how changes in these factors could impact pricing and sales.

Question 5

Profit maximization occurs when marginal revenue equals .
A) marginal profit
B) marginal sale
C) marginal cost
D) none of these

Accepted Answer

In order to maximize profits, a firm must produce at the point where marginal revenue equals marginal cost. This is because at this point, the additional revenue generated by producing an additional unit of output is equal to the additional cost incurred to produce it, resulting in maximum profit for the firm. Therefore, the answer is C) marginal cost.

Question 6

BigTime Products, Inc. sets high prices for its products, and the company seeks profit margin, not volume. In which strategy is BigTime Products engaged?
A) market production
B) market skimming
C) market penetration
D) price fixing

Accepted Answer

BigTime Products is engaged in market skimming, which involves setting high prices for new or innovative products to maximize profits before competitors enter the market. This strategy prioritizes profit margin over sales volume.

Question 7

ABC Company has several product models within its product line. The company charges different prices, which can reflect different functionality.
A) product
B) place
C) promotion
D) aberrant

Accepted Answer

The statement is referring to different product models and the different prices charged for each, indicating that the variations in price are due to differences in functionality of the products.

Question 8

Since we read from left to right, when we see a price, we process the number of dollars before the number of cents. This is why so many prices end in what number?
A) 0
B) 11
C) 33
D) 99

Accepted Answer

The answer of Since we read from left to right,...

Question 9

What type of consumer is represented by the left side of this figure? 
A) one who wants the brand, and is willing to pay more to get it
B) one who appreciates a good deal and will give up the brand to retain the lower price
C) one who values low price and brand name both highly
D) one who does not care about brand name or price

Accepted Answer

The answer of What type of consumer is represented by...

Question 10

is the idea is that the price (on the sticker) is much higher than the referent.
A) Price fixing
B) Sticker shock
C) Predatory pricing
D) Price discrimination

Accepted Answer

Sticker shock refers to the feeling of surprise or confusion a customer experiences when they see a price on a sticker that is much higher than what they expected or what the referent (similar products or services) is priced at. This can lead to a reluctance to purchase the product. The other options (price fixing, predatory pricing, and price discrimination) all refer to different pricing strategies or actions taken by companies, but do not specifically involve an unexpected difference between the sticker price and the referent.

Question 11

What are temporary price cuts or the issuance of coupons referred to as?
A) price promotion
B) price sensitivity
C) price discrimination
D) price instability

Accepted Answer

Temporary price cuts or the issuance of coupons are referred to as price promotions. Price promotions aim to increase sales by offering customers a lower price for a limited time. This strategy is often used to attract new customers or to encourage existing customers to make a purchase.

Question 12

Which of the following is represented by the Greek letter Epsilon?
A) error
B) elasticity
C) excess
D) endpoint

Accepted Answer

Epsilon is the Greek letter used to represent error.

Question 13

A price's role as a cue is so strong that prices are known to contribute to the formation of prior to a purchase.
A) beliefs
B) expectations
C) decisions
D) explanations

Accepted Answer

Prices act as a cue to set the expectation for the value of a product or service, which then contributes to the formation of prior expectations before a purchase.

Question 14

Marketers frequently use to try to estimate likely results of various actions, most frequently price cuts and competitive response.
A) strategies
B) promotions
C) competition
D) game theory

Accepted Answer

Game theory is a mathematical approach to predicting outcomes in situations where multiple players or stakeholders are involved. Marketers can use game theory to model the potential reactions of competitors to pricing strategies and determine the best course of action to take.

Question 15

Services are said to be , which means there is no such thing as storing inventory or excess capacity.
A) perishable
B) price sensitive
C) legitimate
D) concrete

Accepted Answer

Perishable means that services cannot be stored or saved for later use. This is because services are intangible and based on the actions of individuals at a specific point in time.

Question 16

The point of is to find a solution to price wars by getting each player to think about the broader market, rather than only optimizing their own needs.
A) conjoint analysis
B) game theory
C) elasticity
D) auctions

Accepted Answer

Game theory is the study of strategic decision-making and involves analyzing the behavior of individuals and organizations in competitive situations. It can help identify a solution to price wars by getting each player to consider the actions and potential reactions of their competitors, as well as the broader market conditions. Conjoint analysis is a market research technique used to determine how consumers value different attributes of a product or service. Elasticity refers to the responsiveness of demand to changes in price or other factors. Auctions are mechanisms for buying and selling goods or services by having potential buyers bid against each other. While auctions can be used to set prices, they do not necessarily address the issue of price wars between competing players in a market.

Question 17

The point of indifference at which you say, "If you raise the price, forget it, I won't buy; if you drop the price, okay, I will," refers to which of the following terms?
A) reservation price
B) predatory pricing
C) deceptive pricing
D) vertical price fixing

Accepted Answer

The point of indifference is often referred to as the reservation price, which is the highest price a consumer is willing to pay for a particular product or service. If the price exceeds the reservation price, the consumer will not purchase the product or service.

Question 18

To what does FIFO refer?
A) four in, four out
B) first in, first out
C) front it, front out
D) financially fit, financial options

Accepted Answer

FIFO stands for "first in, first out," a method commonly used in inventory and accounting systems to track the order of transactions and ensure that the oldest transactions are processed first.

Question 19

Based on this figure, if American charges $209 for a flight, and Delta charges $279, how much does Southwest charge? 
A) $209
B) $279
C) $99
D) $309

Accepted Answer

Southwest's price is between American and United, which have prices of $209 and $129 respectively. Therefore, the only option that falls between those two prices is $99, which is the price Southwest charges.

Question 20

Company XYZ manufactures quality widgets, but does not invest a significant effort in marketing the company or its widgets. If Company XYZ were to develop a , one of the benefits it would realize is the ability to charge premium prices.
A) company
B) product
C) marketing strategy
D) brand

Accepted Answer

The development of a brand can create a strong reputation and perception of quality in the minds of consumers, which allows for a company to charge premium prices.

Quiz 9: Pricing

is an assessment of what the customer gets compared with what the customer gives up.

If the inner/middle pricing choice between two extremes looks particularly attractive, we call this the .

The idea that price is actually negotiated between the buyer and seller refers to which of the following terms?

Customers are shown products with various combinations of features and attributes, with price being one of them. The customers are asked, "Which combination do you prefer most?," and then, "Next most?" etc. What type of study is being done?

Profit maximization occurs when marginal revenue equals .

BigTime Products, Inc. sets high prices for its products, and the company seeks profit margin, not volume. In which strategy is BigTime Products engaged?

ABC Company has several product models within its product line. The company charges different prices, which can reflect different functionality.

Since we read from left to right, when we see a price, we process the number of dollars before the number of cents. This is why so many prices end in what number?

What type of consumer is represented by the left side of this figure?

is the idea is that the price (on the sticker) is much higher than the referent.

What are temporary price cuts or the issuance of coupons referred to as?

Which of the following is represented by the Greek letter Epsilon?

A price's role as a cue is so strong that prices are known to contribute to the formation of prior to a purchase.

Marketers frequently use to try to estimate likely results of various actions, most frequently price cuts and competitive response.

Services are said to be , which means there is no such thing as storing inventory or excess capacity.

The point of is to find a solution to price wars by getting each player to think about the broader market, rather than only optimizing their own needs.

The point of indifference at which you say, "If you raise the price, forget it, I won't buy; if you drop the price, okay, I will," refers to which of the following terms?

To what does FIFO refer?

Based on this figure, if American charges $209 for a flight, and Delta charges $279, how much does Southwest charge?

Company XYZ manufactures quality widgets, but does not invest a significant effort in marketing the company or its widgets. If Company XYZ were to develop a , one of the benefits it would realize is the ability to charge premium prices.