Question 1

Marketing executives must translate estimates of customer demand into estimates of
A)personnel.
B)advertising expenditures.
C)ancillary product support.
D)revenues the firm expects to receive.
E)supply.

Accepted Answer

Marketing executives must estimate customer demand in order to predict the revenues that the firm expects to receive. This helps to set sales targets, allocate resources, and create a sales forecast. A, B, C, and E are all important factors in marketing, but they are not directly related to translating customer demand into revenue estimates.

Question 2

Demand curve refers to a graph that relates
A)the quantity sold and price, which shows the maximum number of units that will be sold at a given price.
B)the quantity sold and price, which shows the minimum number of units that must be sold to break even.
C)the quantity sold and price, which shows the minimum number of units that must be sold in order to make a profit.
D)total production costs to various price points in order to determine how many units must be sold in order to realize a predetermined profit.
E)primary demand to selective demand.

Accepted Answer

The demand curve relates the quantity of a product that will be sold at different prices, showing the maximum quantity that will be sold at each price point. It does not relate to break-even points or production costs.

Question 3

A demand curve graph typically appears as
A)a parabola with the apex representing the highest price that can be charged without losing customers.
B)a diagonal line going from upper left to lower right demonstrating that as price goes down, demand goes up.
C)an inverted parabola with the lowest point representing the lowest price that can be charged and still meet the company's profit objectives.
D)a diagonal line going from lower left to upper right demonstrating that as prices go up, demand goes up proportionately.
E)two intersecting lines that identify the point at which supply and demand are exactly the same.

Accepted Answer

A demand curve typically shows the relationship between the price of a good or service and the quantity demanded by consumers. The most common type of demand curve is a downward sloping diagonal line, as described in choice B. As the price of a good or service goes down, consumers are usually willing to purchase more of it, and vice versa.

Question 4

Demand factors refers to
A)the number of consumers who can afford to purchase a product or service.
B)the price that should be charged for a given product.
C)consumers' willingness and ability to pay for products and services.
D)the number of consumers who want to purchase a product.
E)the number of consumers who can purchase a product.

Accepted Answer

Demand factors refer to consumers' willingness and ability to pay for products and services. It includes factors such as income, preferences, and availability of substitutes. The other options are not completely encompassing of demand factors.

Question 5

A manufacturing company that introduces a product must know or anticipate what specific price its __________ currently charge or may charge in the future.
A)present and potential competitors
B)financial institutions
C)suppliers
D)unions
E)regulators

Accepted Answer

Present and potential competitors are the most important factor in determining the price of a product. A company needs to know the market price that its competitors are charging or may charge in the future to set an optimal price for its product. This is essential to stay competitive in the market and generate profits. Financial institutions, suppliers, unions, and regulators may have an impact on pricing in certain situations, but they are not as crucial as competitors.

Question 6

If the price for Red Baron frozen cheese pizzas moves from $8 to $6 per unit along a demand curve D₁, most likely the quantity demanded A)increases. B)decreases. C)stays the same. D)has no relationship to the price. E)could not be able to be plotted.

Accepted Answer

According to the law of demand, as the price of a good decreases, the quantity demanded increases. Therefore, if the price of Red Baron frozen cheese pizzas decreases from $8 to $6 per unit, it is likely that the quantity demanded will increase.

Question 7

With consumers able to compare prices on the Internet, they can make more ___________ buying decisions.
A)efficient
B)profitable
C)effective
D)relative
E)affective

Accepted Answer

Consumers can compare various prices quickly and easily online, allowing them to make efficient buying decisions. They can compare prices from multiple vendors and choose the one that provides the best value for their money. This allows them to make informed decisions and save money.

Question 8

All of the following are legal and/or ethical considerations when setting a final price except
A)geographical pricing.
B)predatory pricing.
C)showrooming.
D)price fixing.
E)deceptive pricing.

Accepted Answer

Showrooming is not a legal or ethical consideration when setting a final price. Showrooming is a consumer behavior where a shopper visits a physical store to examine a product in person but then purchases the product online at a cheaper price. It is a common practice and not illegal or unethical. However, the other options are all legal and ethical considerations when setting a final price. Geographical pricing refers to pricing variations based on the location of the buyer. Predatory pricing is setting prices below cost to drive competitors out of business. Price fixing is an illegal agreement between competitors to set prices at a certain level, and deceptive pricing involves misleading consumers about a product's price or value.

Question 9

While consumer tastes and price and availability of similar products determine what consumers want to buy, consumer income determines
A)where they buy.
B)the degree of brand loyalty.
C)the degree of repeat buys.
D)what they can buy.
E)their desire to buy.

Accepted Answer

Consumer income determines what they can afford to buy. If a product is too expensive for their income level, they will not be able to purchase it. Similarly, if a product falls within their budget, they may be more likely to buy it.

Question 10

Which of the following illustrates a shift in the demand curve?
A)When prices remain the same, there is a significant decrease in demand.
B)As the price is raised, the quantity demanded increases, assuming all else stays the same.
C)When prices remain the same, there is an increase or decrease in demand.
D)As the price is lowered, the quantity demanded decreases, assuming all else stays the same.
E)An internal matter has forced a price change of some type, but it does not impact demand.

Accepted Answer

A shift in the demand curve occurs when there is a change in demand at every price point, rather than a change in quantity demanded due to a change in price (a movement along the demand curve). Option C states that there is an increase or decrease in demand when prices stay the same, indicating a shift in the demand curve. Options A, B, and D describe movements along the demand curve due to changes in price, and option E mentions a price change that does not impact demand.

Question 11

Basic to setting a product's price is the extent of __________. This information is used in estimating the revenues the firm expects to receive.
A)management's commitment to the product relative to other products in the line
B)curiosity or interest potential consumers expressed during market testing
C)customer demand for it
D)the firm's promotional budget
E)distribution requirements

Accepted Answer

Customer demand is a key factor in setting a product's price as it helps the firm estimate the revenues it expects to receive. Management's commitment to the product, consumer interest during market testing, promotional budget, and distribution requirements may also influence price setting, but customer demand is fundamental.

Question 12

All of the following are demand factors except
A)the price of similar products.
B)consumer tastes.
C)consumer income.
D)the availability of similar products.
E)the number of distribution outlets carrying the product.

Accepted Answer

The availability of similar products is a supply factor, not a demand factor. The other options are all factors that affect the demand for a product.

Question 13

Which of the following statements about the factors that influence demand is true?
A)As the availability of close substitutes increases, the demand for a product increases.
B)As real consumer income increases, the demand for a product increases.
C)As the price of close substitutes increases, the demand for a product declines.
D)Changing consumer tastes have little impact on the demand for a product.
E)As real consumer income decreases, the demand for a product increases.

Accepted Answer

As real consumer income increases, consumers have more purchasing power, which often leads to an increase in demand for goods and services. This is because consumers have more money to spend and therefore are willing to buy more products.

Question 14

The maximum quantity of products consumers will buy at given price is shown by
A)a demand curve.
B)a price constraint.
C)a break-even point.
D)a supply curve.
E)a marginal revenue curve.

Accepted Answer

The maximum quantity of products consumers will buy at a given price is described by the demand curve, which shows the relationship between price and quantity demanded by consumers. As the price of a product falls, the quantity demanded typically increases as consumers perceive it to be a better value. The demand curve slopes downward showing this inverse relationship between price and quantity demanded.

Question 15

Florida Power & Light, an electric power company, is the only source of electricity for consumers in most parts of the Florida panhandle. The company is __________, despite the fact that it must seek approval from the state utility commission for the rates it can charge.
A)a free enterprise firm
B)an oligopoly
C)a monopolistic competitor
D)a competitor in a pure competition
E)a pure monopoly

Accepted Answer

The description of Florida Power & Light being the only source of electricity for consumers in most parts of the Florida panhandle indicates that it is a pure monopoly. While the company must seek approval for the rates it can charge, this does not change its status as a monopoly.

Question 16

The vertical axis of a demand curve graph represents
A)market growth rate.
B)relative market share.
C)price per unit.
D)potential profit in dollars.
E)quantity demanded.

Accepted Answer

The answer of The vertical axis of a demand curve...

Question 17

Factors that determine consumers' willingness and ability to pay for products and services are referred to as
A)supply factors.
B)demand factors.
C)affordability factors.
D)elasticity factors.
E)macro environmental factors.

Accepted Answer

Demand factors are the factors that influence consumers' willingness and ability to pay for products and services. These factors include consumers' income, preferences, perceived value, and availability of substitutes. Supply factors, on the other hand, are the factors that affect the production and supply of products and services, such as technology, production costs, and resource availability. Affordability factors and elasticity factors are subcategories of demand factors, while macro environmental factors are external factors, such as political, economic, social, and technological factors, that affect the business environment as a whole but not necessarily consumers' willingness and ability to pay.

Question 18

A movement along a demand curve (up or down) for a product occurs ___________________, assuming that other factors such as consumer tastes, price and availability of substitutes, and consumer incomes remain unchanged.
A)when its price is lowered or increased and the quantity demanded for it correspondingly increases or decreases
B)when its demand is lowered or increased and the price offered for it correspondingly increases or decreases
C)when its demand and price are lowered
D)when its demand and price are increased
E)at the break-even point

Accepted Answer

A movement along a demand curve occurs when there is a change in price which then affects the quantity demanded. This change in price results in a corresponding change in the quantity demanded as shown by the movement along the demand curve. Other factors such as consumer tastes, price and availability of substitutes, and consumer incomes remaining unchanged means that there is no shift in the demand curve, but rather a change in quantity demanded due to a change in price.

Question 19

When estimating demand, price is not the only factor to be considered. Three other elements emphasized by economists are consumer tastes, price and availability of similar products, and
A)consumer income.
B)consumer psychographics.
C)size of the target market.
D)current political agendas.
E)green substitutes.

Accepted Answer

Consumer income is one of the three factors emphasized by economists to consider along with consumer tastes and price and availability of similar products when estimating demand. The other choices are not directly related to the estimation of demand.

Question 20

The horizontal axis of a demand curve graph represents
A)market growth rate.
B)relative market share.
C)price per unit.
D)potential profit in dollars.
E)quantity demanded.

Accepted Answer

The horizontal axis on a demand curve graph represents the quantity demanded, which is the amount of a product or service that consumers are willing and able to purchase at various prices. The relationship between price and quantity demanded is shown on the graph as a downward sloping line.

Quiz 13: Building the Price Foundation

Marketing executives must translate estimates of customer demand into estimates of

Demand curve refers to a graph that relates

A demand curve graph typically appears as

Demand factors refers to

A manufacturing company that introduces a product must know or anticipate what specific price its __________ currently charge or may charge in the future.

If the price for Red Baron frozen cheese pizzas moves from $8 to $6 per unit along a demand curve D1, most likely the quantity demanded

With consumers able to compare prices on the Internet, they can make more ___________ buying decisions.

All of the following are legal and/or ethical considerations when setting a final price except

While consumer tastes and price and availability of similar products determine what consumers want to buy, consumer income determines

Which of the following illustrates a shift in the demand curve?

Basic to setting a product's price is the extent of __________. This information is used in estimating the revenues the firm expects to receive.

All of the following are demand factors except

Which of the following statements about the factors that influence demand is true?

The maximum quantity of products consumers will buy at given price is shown by

Florida Power & Light, an electric power company, is the only source of electricity for consumers in most parts of the Florida panhandle. The company is __________, despite the fact that it must seek approval from the state utility commission for the rates it can charge.

The vertical axis of a demand curve graph represents

Factors that determine consumers' willingness and ability to pay for products and services are referred to as

A movement along a demand curve (up or down) for a product occurs ___________________, assuming that other factors such as consumer tastes, price and availability of substitutes, and consumer incomes remain unchanged.

When estimating demand, price is not the only factor to be considered. Three other elements emphasized by economists are consumer tastes, price and availability of similar products, and

The horizontal axis of a demand curve graph represents

If the price for Red Baron frozen cheese pizzas moves from $8 to $6 per unit along a demand curve D₁, most likely the quantity demanded