Question 1

TB Figure: 1 
-TB Figure 1 shows there are six distinct steps in the pricing process: identify pricing objectives and constraints; estimate demand and revenue; determine cost,volume,and profit relationships; __________; set list or quoted price; and make special adjustments to list or quoted price.

Accepted Answer

The missing step in the pricing process is to select an approximate price level. The other steps listed are already included in the process.

Question 2

If competitive market circumstances are such that there is no price competition,no product differentiation,and the purpose of advertising is to increase demand for the product class,then _____ must exist in the industry.

Accepted Answer

A pure monopoly exists when there is only one seller in a market and there are no close substitutes for the product. In this case, the monopolist has the power to set the price and output level, and there is no price competition.

Question 3

TB Figure: 1 
-TB Figure 1 shows there are six distinct steps in the pricing process: identify pricing objectives and constraints; estimate demand and revenue; determine cost,volume,and profit relationships; select an approximate price level; set list or quoted price; and __________.

Accepted Answer

The sixth step in the pricing process is to make special adjustments to the list or quoted price. This step involves considering various factors such as discounts, allowances, and promotional pricing, among others, to arrive at the final price that the customer will pay. The other options listed are either completed earlier in the process (options A and B) or not part of the pricing process (option D).

Question 4

Imagine you have some extra cash and would like to invest in something that will give you some extra money while you look for a job after graduation.If you invest $177 in a black-pawed Zip (a cat)Beanie Baby,you should remember that its price is most closely tied to:

Accepted Answer

The price of a Beanie Baby is most closely tied to supply and demand. As with any collectible item, the value is determined by how many people are interested in buying versus how many of the item are available. Therefore, investing in a black-pawed Zip Beanie Baby may result in a profit if demand increases and the supply dwindles. However, it should be noted that collectibles can be a risky investment and there is no guarantee of profit.

Question 5

All of the following would be considered pricing constraints,except

Accepted Answer

Human resources are not related to pricing constraints, as they pertain to the availability and quality of employees rather than pricing factors. The other options listed (demand for the product class, newness of the product, and cost of producing the product) are all relevant pricing constraints that can impact the pricing strategy for a product.

Question 6

An analysis of a prospective product shows it is expected to grow by at least 10 percent each year over the next 5 years,and then enter the maturity phase of its product life cycle.This type of analysis would provide useful information in which stage of the price-setting process?

Accepted Answer

The answer of An analysis of a prospective product shows...

Question 7

Often,the earlier a product is in its life cycle:

Accepted Answer

When a product is in its early stages of the life cycle, there is less competition and the firm has the flexibility to charge a higher price. This is because the product is new and innovative, and customers are willing to pay a premium for it. As the product moves through its life cycle, competition increases and the firm may need to lower prices to remain competitive. However, in the early stages, a higher price can help to establish the product as a premium offering and create a perception of high quality.

Question 8

Which term describes factors that affect price and include: newness of the product,whether it is part of a product line,and cost of changing a price?

Accepted Answer

Pricing constraints refer to the factors that limit a company's ability to set prices, including the newness of the product, whether it is part of a product line, and the cost of changing a price. Price fixings refer to illegal agreements between companies to set prices at a certain level, price elasticities refer to the responsiveness of demand to changes in price, and pricing demands refer to the expectations or requirements of customers regarding price.

Question 9

Florida Power & Light,an electric power company,is the only source of electricity for consumers in most parts of the Florida panhandle.As a(n)_____,the company receives approval from the state utility commission for the rates it can charge.

Accepted Answer

A pure monopoly exists when there is only one seller of a particular product, in this case, Florida Power & Light being the only source of electricity for most consumers in the Florida panhandle. As a pure monopoly, the company receives approval from the state utility commission for the rates it can charge.

Question 10

Most government crown organizations in Canada operate in which competitive market?

Accepted Answer

Most government crown organizations in Canada operate in a pure monopoly market because they are the only supplier of a particular good or service in a given market.

Question 11

TB Figure: 1 
-TB Figure 1 shows there are six distinct steps in the pricing process: identify pricing constraints and objectives; estimate demand and revenue; estimate cost,volume,and profit relationships; select an appropriate price level; __________; and make special adjustments to list or quoted price.

Accepted Answer

The blank in the sentence is filled by "set list or quoted price". The final step in the pricing process is to set the final list or quoted price, based on the analysis of demand, costs, competition, and pricing objectives. The other options mentioned (B, C, and D) are part of the analysis phase and occur before the final pricing decision is made.

Question 12

If competitive market circumstances are such that there is some leader-follower price competition,some product differentiation,and the purpose of advertising is to inform,but avoid price competition,then _____ must exist in the industry.

Accepted Answer

An oligopoly must exist in the industry because it is characterized by a few firms that dominate the market, leading to leader-follower dynamics, product differentiation, and strategic advertising to avoid price competition.

Question 13

Each of the following is a true statement with respect to acting as a constraint on pricing EXCEPT:

Accepted Answer

Factors internal to the organization such as production costs, labor costs, and overhead costs can also act as constraints on pricing.

Question 14

The former Soviet republic Turkmenistan is in Central Asia and is one of the last countries on the planet to gain Internet access.The only Internet service provider for the entire country is Turkmen Telecom.There is no need for price competition,promotion competition,or product differentiation because Turkmen Telecom is a(n):

Accepted Answer

Turkmen Telecom is the only Internet service provider for the entire country, making it a pure monopoly. There is no competition in the market, giving them complete control over the price, promotion, and product differentiation.

Question 15

Which pricing constraint is demonstrated by the following statement: "Most public utilities must petition regulatory commissions in order to obtain a rate increase"?

Accepted Answer

Public utilities operate in regulated markets, which are a type of competitive market where prices are controlled by regulatory commissions.

Question 16

When George and Arthurine Renfro decided to start a family business in 1990 and market chowchow,a southern regional food,they had to determine how they would price the chowchow by examining the demand for the product (would people rather eat home-made or store-bought),the cost of getting the jars for bottling the chowchow,and how much it would cost to distribute the product to area stores.In other words,the Renfros had to begin the development of their pricing strategy by:

Accepted Answer

The Renfros needed to identify pricing constraints such as demand, production costs, and distribution costs to develop their pricing strategy.

Question 17

Pricing constraints are:

Accepted Answer

Pricing constraints are factors that limit the latitude of prices a firm may set, such as production costs, competitors' prices, consumer demand, and market conditions. These constraints can prevent a firm from setting high prices that would lead to low sales, or setting low prices that would lead to profit loss. Therefore, pricing constraints must be considered when setting pricing objectives and strategies.

Question 18

The competitive market situation in which the few sellers are sensitive to one another's prices is called:

Accepted Answer

In an oligopoly market situation, there are only a few sellers who are aware of each other's prices and strategies. They tend to follow each other's pricing decisions, and any change in prices by one seller can affect the others' profits. Therefore, they tend to compete on non-price factors like quality, features, and marketing strategies. This makes oligopoly different from pure competition and monopolistic competition. Pure monopoly is a market situation where there is only one seller, while monopolistic competition is a situation with many sellers who offer differentiated products.

Question 19

Pharmacist and new father Kenneth Kramm wanted his son to take his medicine,but it was a battle.As a result Kramm developed FLAVORx,a liquid medicine-flavouring system that can mask the taste or smell of medicine.FLAVORx tastes of strawberry or grape and has no effect on the medicinal value of the drug to which it is added.It is the first product of its kind.Because Flavorx is in the _____ stage of the product life cycle,the price of the medicine-flavouring system should be _____ than the price that would usually be charged.

Accepted Answer

FLAVORx is in the introductory stage of the product life cycle, where prices are often set higher to recoup development costs and because there is little competition.

Question 20

The marketing director for a(n)_____ is most likely to believe,"The purpose of advertising is to increase demand for the product class."

Accepted Answer

The answer of The marketing director for a(n)_____ is most...

Quiz 13: Pricing Products and Services

TB Figure: 1 -TB Figure 1 shows there are six distinct steps in the pricing process: identify pricing objectives and constraints; estimate demand and revenue; determine cost,volume,and profit relationships; __________; set list or quoted price; and make special adjustments to list or quoted price.