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What is the difference between a one-price policy and a flexible-price policy?

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A one-price policy sets one price for al...

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What are the conditions favoring the use of penetration pricing?

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The conditions favoring penetration pric...

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With a __________ pricing strategy,a price setter stresses the __________ side of the pricing problem.


A) demand-oriented; cost
B) supply-oriented; target ROI
C) competition-oriented; marketing channel
D) cost-oriented; cost
E) profit-oriented; revenue

F) B) and E)
G) D) and E)

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Talbot's sells women's clothes.A longsleeve scoopneck t-shirt with the Talbot's label costs $45.By comparison,you can buy a t-shirt for $5 at a Family Dollar Store,but it won't have the prestigious Talbot's label or quality.What kind of demand-oriented approach to pricing does Talbot's use?


A) experience curve pricing
B) skimming pricing
C) demand-backward pricing
D) prestige pricing
E) flexible pricing

F) C) and D)
G) B) and C)

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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

F) D) and E)
G) A) and C)

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Assume it costs Lady Marion Seafood,Inc.$30 to catch,process,freeze,package,and ship 5-pound packages of Alaskan salmon.The firm adds 60 percent to the cost of its salmon products and charges customers a total of $48 for a postage-paid vacuum-sealed package.What type of pricing does Lady Marion Seafood use to arrive at its final price?


A) target return-on-sales pricing
B) bundle pricing
C) standard markup pricing
D) target profit pricing
E) customary pricing

F) A) and E)
G) A) and B)

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Standard markup pricing is considered to be a __________ approach to pricing.


A) demand-oriented
B) profit-oriented
C) cost-oriented
D) competition-oriented
E) service-oriented

F) A) and C)
G) A) and E)

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Pricing constraints are


A) the controllable elements in a firm's marketing mix that allow it to charge the highest price possible.
B) formulas used in establishing break-even points and price elasticity of demand.
C) factors that limit the range of prices a firm may set.
D) factors that expand the range of prices a firm may set.
E) virtual boundaries used when setting the initial price on a new product.

F) A) and E)
G) A) and D)

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The four types of discounts are


A) quantity,trade-in,promotional,and cash.
B) quantity,seasonal,trade (functional) ,and cash.
C) quantity,seasonal,promotional,and FOB.
D) cash,trade-in,seasonal,and promotional.
E) trade-in,promotional,geographic,and functional.

F) A) and C)
G) A) and E)

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Variable cost refers to


A) the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold.
B) the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold.
C) the total expense incurred by a firm in producing and marketing a product,which equals the sum of fixed cost and marginal cost.
D) the average amount of money received for selling one unit of a product or simply the price of that unit.
E) the change in total cost that results from producing and marketing one additional unit of a product.

F) None of the above
G) B) and E)

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Which of the following pricing techniques results in the manufacturers deliberately adjusting the composition and features of a product to achieve the desired price for consumers?


A) cost-plus percentage-of-cost pricing
B) standard markup pricing
C) cost-plus fixed-fee pricing
D) experience curve pricing
E) target pricing

F) A) and D)
G) B) and D)

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Considering pricing objectives and constraints and choosing among pricing approaches are included in which step in setting a final price for a product?


A) set list or quoted price
B) select an approximate price level
C) scan competitors for prices of similar products or services
D) determine cost,volume,and profit relationships
E) make adjustments to the list price

F) All of the above
G) C) and E)

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To promote their business,some psychics advertise free tarot-card readings and other insights into their customers' futures on television.Unfortunately,this "free reading" has cost some unsuspecting callers as much as $700 in phone charges.This sort of pricing practice would be primarily monitored by the


A) Consumer Protection Agency.
B) U.S.Department of Justice.
C) Federal Trade Commission.
D) Federal Communications Commission.
E) Consumer Product Safety Commission.

F) A) and D)
G) B) and E)

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With cost-oriented approaches,a price setter stresses the cost side of the pricing problem,not the __________ side.


A) shareholder equity
B) income
C) service
D) supply
E) demand

F) A) and E)
G) B) and C)

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A trade-in allowance refers to


A) a noncash exchange of one product for another of equal or greater value.
B) a cash-back payment when a more expensive item is replaced with a less expensive item.
C) a price reduction given when a used product is part of the payment on a new product.
D) the return of money based on proof of purchase.
E) a cash payment to a retailer for extra in-store support or special featuring of the brand.

F) D) and E)
G) A) and E)

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To increase value the most,marketers should


A) decrease benefits.
B) decrease benefits and increase price.
C) decrease price and increase benefits.
D) decrease price and decrease benefits.
E) do nothing and let the perceived value of the item increase as it matures in its life cycle.

F) A) and E)
G) A) and D)

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The unit variable cost (UVC) equals variable cost (VC) divided by __________.


A) quantity (Q)
B) fixed costs (FC)
C) total cost (TC)
D) total revenue (TR)
E) price per unit of the product (P)

F) B) and D)
G) A) and C)

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To encourage buyers to stock inventory earlier than their normal demand would require,manufacturers often use


A) noncumulative discounts.
B) cumulative discounts.
C) seasonal discounts.
D) trade discounts.
E) functional discounts.

F) A) and C)
G) C) and E)

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A price reduction given when a used product is part of the payment on a new product is referred to as a __________.


A) cash discount
B) seasonal discount
C) trade-in allowance
D) promotional allowance
E) subsidy discount

F) A) and B)
G) A) and C)

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A flexible-price policy gives marketers __________ in setting the final price in light of demand,cost,and competitive factors.


A) no leeway
B) total freedom
C) little discretion
D) considerable discretion
E) limited competitive authority

F) B) and C)
G) A) and C)

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