Question 1

The 99-Center is a retail store where all the merchandise is priced at 99 cents.This retailer uses a _____.

Accepted Answer

The 99-Center uses a single-price tactic because all items are priced the same, at 99 cents.

Question 2

___________ is a price tactic that tries to get consumers into a store through false or misleading price advertising and then uses high-pressure selling to persuade consumers to buy more expensive merchandise.

Accepted Answer

Bait pricing is a deceptive tactic where consumers are lured into a store with the promise of low prices on certain items, only to be pressured into purchasing more expensive products.

Question 3

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

Accepted Answer

The Robinson-Patman Act of 1936 addresses price discrimination, not predatory pricing. Predatory pricing is generally addressed under antitrust laws like the Sherman Act.

Question 4

_____ is a price tactic in which different customers pay different prices for essentially the same merchandise bought in equal quantities.

Accepted Answer

Flexible pricing is a tactic where different customers are charged different prices for the same product or service, often based on negotiation or other factors.

Question 5

_____ is a price tactic that charges freight costs from a given point,regardless of the city from which the goods are shipped.

Accepted Answer

Basing-point pricing is a tactic where freight costs are charged from a specific location, regardless of the actual shipping point.

Question 6

Which of the following statements is true of geographic pricing for freight?

Accepted Answer

Postage stamp pricing ensures that all purchasers pay the same total cost for identical products, regardless of their location.

Question 7

A _____ is a price reduction offered to a consumer,an industrial user,or a marketing intermediary in return for prompt payment of a bill.

Accepted Answer

A cash discount is a price reduction offered to a consumer, an industrial user, or a marketing intermediary in return for prompt payment of a bill.

Question 8

__________ is the practice of offering a product line with several items at specific price points.

Accepted Answer

Price lining is the strategy of offering a product line with several items at specific price points.

Question 9

Which of the following statements is true of value-based pricing?

Accepted Answer

Value-based pricing has grown out of the quality movement as it focuses on setting prices based on the perceived value to the customer rather than solely on cost.

Question 10

A cash refund given for the purchase of a product during a specific period is called

Accepted Answer

A rebate is a cash refund given to consumers for purchasing a product within a specific time frame.

Question 11

Marketing two or more products in a single package for a special price is called _____________.

Accepted Answer

Price bundling refers to the practice of marketing two or more products together in a single package for a special price.

Question 12

Which of the following is a price tactic that uses odd-numbered prices to connote bargains and even-numbered prices to imply quality?

Accepted Answer

Psychological pricing is a tactic where odd-numbered prices are used to suggest bargains, while even-numbered prices imply higher quality.

Question 13

A price reduction offered to buyers who purchase product in multiple units or above a specified dollar amount is termed a ______ discount.

Accepted Answer

A quantity discount is a price reduction given to buyers who purchase in large volumes or above a specified dollar amount.

Question 14

Which of the following statements is true of price lines?

Accepted Answer

Price lines allow sellers to offer products at different price points, catering to different market segments and consumer preferences.

Question 15

The geographic pricing method that is a modification of uniform delivered pricing,divides the United States (or the total market)into segments,and charges a flat freight rate to all customers in that segment,is called ___________.

Accepted Answer

Zone pricing divides the market into segments and charges a flat freight rate to all customers in that segment.

Question 16

A price tactic that requires the buyer to absorb the freight costs from the shipping point is called ______________.

Accepted Answer

FOB origin pricing means the buyer is responsible for the freight costs from the shipping point.

Question 17

_______________ is a price tactic in which the seller pays the actual freight charges and bills every purchaser an identical,flat freight charge.

Accepted Answer

Uniform delivered pricing is a tactic where the seller charges the same flat freight fee to all buyers, regardless of their location, while covering the actual freight costs themselves.

Question 18

To prove predatory pricing,it must be proved that the destructive company explicitly tried to ruin a competitor and that the predatory price was below the predator's average variable cost.

Accepted Answer

Predatory pricing involves setting prices low to eliminate competition, and proving it typically requires showing intent to harm competitors and pricing below average variable cost.

Question 19

When using _____,the seller pays all or part of the actual shipment charges and does not pass them on to the buyer.

Accepted Answer

Freight absorption pricing is a strategy where the seller absorbs all or part of the shipping costs, rather than passing them on to the buyer.

Question 20

Which term refers to a deduction from list price applied to a customer's total purchases made during a specific period?

Accepted Answer

A cumulative quantity discount is a deduction from the list price that is applied to a customer's total purchases over a specific period, encouraging larger orders over time.

Quiz 19: Pricing Concepts