Question 1

Microsoft, Sony, and Nintendo are the three principal firms in the video game console market. How much price competition is most likely for video game makers?

Accepted Answer

A)  There is almost none; the market sets the price.
B)  There is some competition within a range of prices.
C)  There is generally a price leader that sets the price.
D)  Each firm is aware of each other's prices and may adjust prices based on those of the other firms.
E)  Price is set by the seller but regulated by the government.F) All of the above
G) None of the above

Question 2

The sum of the expenses of a firm that is stable and does not change with the quantity of the product that is produced and sold is referred to as

Accepted Answer

A)  fixed cost.
B)  total cost.
C)  variable cost.
D)  marginal cost.
E)  overhead cost.F) A) and E)
G) A) and D)

Question 3

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

Accepted Answer

A)  quantity (Q) .
B)  fixed costs (F
C)  .
C)  total cost (T
C)  .
D)  total revenue (TR) .
E)  price per unit of the product (P) .F) D) and E)
G) C) and D)

Question 4

Calculate a firm's total revenue (TR)  using the following information: the unit price (P)  for a product is $40; the quantity sold (Q)  is 2,000; the fixed cost (FC)  is $50,000; and the variable cost (VC)  is $20,000.

Accepted Answer

A)  $10,000
B)  $50,000
C)  $110,000
D)  $150,000
E)  cannot be determined with the information providedF) D) and E)
G) B) and D)

Question 5

Estimating demand, sales revenue, and price elasticity are issues that would be addressed during __________ of the price-setting process.

Accepted Answer

A)  Step 1
B)  Step 2
C)  Step 3
D)  Step 4
E)  Step 5F) C) and D)
G) B) and E)

Question 6

The break-even point (BEP)  = [__________ ÷ (Unit price - Unit variable cost) ].

Accepted Answer

A)  Total cost
B)  Total expense
C)  Fixed cost
D)  Unit variable cost
E)  Total number of units produced or quantityF) A) and D)
G) D) and E)

Question 7

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

Accepted Answer

A)  geographical pricing.
B)  predatory pricing.
C)  showrooming.
D)  price fixing.
E)  deceptive pricing.F) B) and E)
G) D) and E)

Question 8

Demand factors refers to

Accepted Answer

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.F) All of the above
G) B) and C)

Question 9

Creative marketers engage in value-pricing, which is the practice of simultaneously __________ while maintaining or decreasing price.

Accepted Answer

A)  decreasing product and service benefits
B)  increasing product and service benefits
C)  decreasing profit
D)  analyzing benefits
E)  decreasing costF) C) and D)
G) A) and C)

Question 10

There are more than 100 companies that manufacture natural and artificial flavorings used to enhance the taste of food before it is sold to consumers. Many of these manufacturers are regional operations. Many differentiate themselves from the competition in their advertising by specializing in one or two types of foods for which they provide flavorings. Some use their distribution strategies as a means of differentiating themselves from their competition. This industry is most likely an example of

Accepted Answer

A)  pure monopoly.
B)  oligopoly.
C)  monopolistic competition.
D)  bilateral monopoly.
E)  monopolistic oligopoly.F) B) and C)
G) A) and E)

Question 11

The executive vice president of Washburn Guitars has set a sales target of 2,000 units for a new line of guitars. This type of objective is a __________ pricing objective.

Accepted Answer

A)  profit
B)  target return
C)  unit volume
D)  market share
E)  survivalF) C) and D)
G) B) and D)

Question 12

Explain the price equation in the context of a new car purchase.

Accepted Answer

The price equation is: Final price = Lis...

Question 13

Suppose you are the owner of a picture frame store and you wish to calculate how many frames you must sell to cover your fixed and variable costs at a given price. Let's assume that the demand for your frames is strong, so the average price customers are willing to pay for each picture frame is $120. Also, suppose your fixed costs (FC)  total $32,000 (real estate taxes, interest on a bank loan, etc.)  and unit variable cost (UVC)  for a picture frame is $40 (labor, glass, frame, and matting) . What is the quantity of picture frames you will need to sell to break even?

Accepted Answer

A)  200 picture frames
B)  400 picture frames
C)  800 picture frames
D)  1,600 picture frames
E)  2,000 picture framesF) B) and C)
G) A) and E)

Question 14

Which of the following statements would most likely be spoken during Step 3 in the price-setting process?

Accepted Answer

A)  "In order to break even, we will need to sell at least 500,000 units."
B)  "We have to try to achieve an 8 percent profit share."
C)  "The starting price should be $4.99 and we can raise the price again in six months."
D)  "But, if we increase the price even by $1, how many customers will we lose?"
E)  "We should probably price the extra large version somewhere between $600 and $650."F) B) and C)
G) A) and D)

Question 15

Price elasticity of demand is determined by a number of factors such as the availability of substitutes, the cash outlay of the purchase relative to a person's disposable income, and

Accepted Answer

A)  the stage of the product or service in its product life cycle.
B)  the degree of carrying costs for the manufacturer or distributor.
C)  the financial resources of the organization itself.
D)  the ability of the organization to meet sudden increases in demand.
E)  the necessity of the product or service.F) A) and C)
G) B) and D)

Question 16

Which of the following would be an example of an objective in Step 1 of the price-setting process?

Accepted Answer

A)  We need to find the least expensive distributor.
B)  We need to make allowances for large quantity orders.
C)  We need to increase the price during the holiday shopping season.
D)  We need to forget profits right now; just make sure we break even.
E)  We need to hire a professional accountant.F) A) and B)
G) B) and E)

Question 17

The ratio of the firm's sales revenues or unit sales to those of the industry (competitors plus the firm itself)  is referred to as

Accepted Answer

A)  target return on sales.
B)  industry profit.
C)  unit volume.
D)  market share.
E)  profit.F) None of the above
G) A) and E)

Question 18

Companies often pursue a market share objective when

Accepted Answer

A)  industry sales are flat or declining.
B)  profits are increasing.
C)  industry sales are beginning to rise.
D)  there is a sudden increase in production costs.
E)  stockholders are seeking higher dividends.F) D) and E)
G) B) and E)

Question 19

List the following competitive markets from most competitive to least competitive.

Accepted Answer

A)  monopolistic competition, pure monopoly, pure competition, and oligopoly
B)  pure competition, monopolistic competition, oligopoly, and pure monopoly
C)  pure competition, monopolistic competition, pure monopoly, and oligopoly
D)  oligopoly, pure competition, monopolistic competition, and pure monopoly
E)  pure monopoly, oligopoly, monopolistic competition, and pure competitionF) A) and E)
G) C) and E)

Question 20

Fixed cost refers to

Accepted Answer

A)  the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold.
B)  the total expense incurred by a firm in producing and marketing a product, which equals the sum of overhead cost and variable cost.
C)  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.
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 expenses that results from producing and marketing one additional unit of a product.F) All of the above
G) A) and B)

Exam 13: Building the Price Foundation

Explain the price equation in the context of a new car purchase.

Correct Answer
verified
The price equation is: Final price = Lis...
View Answer

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

Correct Answer
verified

Companies often pursue a market share objective when

Correct Answer
verified

Price elasticity of demand is determined by a number of factors such as the availability of substitutes, the cash outlay of the purchase relative to a person's disposable income, and

Correct Answer
verified

Which of the following would be an example of an objective in Step 1 of the price-setting process?

Correct Answer
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Correct Answer
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List the following competitive markets from most competitive to least competitive.

Correct Answer
verified

Demand factors refers to

Correct Answer
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The ratio of the firm's sales revenues or unit sales to those of the industry (competitors plus the firm itself) is referred to as

Correct Answer
verified

Estimating demand, sales revenue, and price elasticity are issues that would be addressed during __________ of the price-setting process.

Correct Answer
verified

Correct Answer
verified

The sum of the expenses of a firm that is stable and does not change with the quantity of the product that is produced and sold is referred to as

Correct Answer
verified

Calculate a firm's total revenue (TR) using the following information: the unit price (P) for a product is $40; the quantity sold (Q) is 2,000; the fixed cost (FC) is $50,000; and the variable cost (VC) is $20,000.

Correct Answer
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Which of the following statements would most likely be spoken during Step 3 in the price-setting process?

Correct Answer
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Fixed cost refers to

Correct Answer
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Creative marketers engage in value-pricing, which is the practice of simultaneously __________ while maintaining or decreasing price.

Correct Answer
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The break-even point (BEP) = [__________ ÷ (Unit price - Unit variable cost) ].

Correct Answer
verified

Microsoft, Sony, and Nintendo are the three principal firms in the video game console market. How much price competition is most likely for video game makers?

Correct Answer
verified

The executive vice president of Washburn Guitars has set a sales target of 2,000 units for a new line of guitars. This type of objective is a __________ pricing objective.

Correct Answer
verified

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

Correct Answer
verified

Exam 13: Building the Price Foundation

Explain the price equation in the context of a new car purchase.

Correct AnswerverifiedThe price equation is: Final price = Lis...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Companies often pursue a market share objective when

Correct AnswerverifiedShow Answer

Price elasticity of demand is determined by a number of factors such as the availability of substitutes, the cash outlay of the purchase relative to a person's disposable income, and

Correct AnswerverifiedShow Answer

Which of the following would be an example of an objective in Step 1 of the price-setting process?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

List the following competitive markets from most competitive to least competitive.

Correct AnswerverifiedShow Answer

Demand factors refers to

Correct AnswerverifiedShow Answer

The ratio of the firm's sales revenues or unit sales to those of the industry (competitors plus the firm itself) is referred to as

Correct AnswerverifiedShow Answer

Estimating demand, sales revenue, and price elasticity are issues that would be addressed during __________ of the price-setting process.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The sum of the expenses of a firm that is stable and does not change with the quantity of the product that is produced and sold is referred to as

Correct AnswerverifiedShow Answer

Calculate a firm's total revenue (TR) using the following information: the unit price (P) for a product is $40; the quantity sold (Q) is 2,000; the fixed cost (FC) is $50,000; and the variable cost (VC) is $20,000.

Correct AnswerverifiedShow Answer

Which of the following statements would most likely be spoken during Step 3 in the price-setting process?

Correct AnswerverifiedShow Answer

Fixed cost refers to

Correct AnswerverifiedShow Answer

Creative marketers engage in value-pricing, which is the practice of simultaneously __________ while maintaining or decreasing price.

Correct AnswerverifiedShow Answer

The break-even point (BEP) = [__________ ÷ (Unit price - Unit variable cost) ].

Correct AnswerverifiedShow Answer

Microsoft, Sony, and Nintendo are the three principal firms in the video game console market. How much price competition is most likely for video game makers?

Correct AnswerverifiedShow Answer

The executive vice president of Washburn Guitars has set a sales target of 2,000 units for a new line of guitars. This type of objective is a __________ pricing objective.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified
The price equation is: Final price = Lis...
View Answer

Correct Answer
verified

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