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Exam 13: Building the Price Foundation

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Question 91

Multiple Choice

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Setting list or quoted prices would occur during __________ of the price-setting process.

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

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

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Question 92

Multiple Choice

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There are a lot of skateboards on the market, but when it was launched the BMW Streetcarver was the only one with stabilizers and wheel design based on BMW's automobiles. This technology gave the BMW Streetcarver better control at high speeds and around sharp turns than any other brand. The skateboard was priced at $495, which left many consumers (especially young males) who might have wanted to buy the Streetcarver unable to afford it. This inability to pay for the high-priced BMW-made skateboard shows the effect of __________ on sales.

A) demand factors
B) macroeconomic environmental factors
C) barter factors
D) supply factors
E) exchange parameters

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

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Question 93

Multiple Choice

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Which of the following statements regarding price changes is most accurate?

During the __________ stage of its product life cycle, a firm has great latitude in setting and maintaining a premium price.

Pricing constraints are

A company that manages apartments decides to buy 15 new dishwashers at a list price of $550 each as replacements for old dishwashers in a small apartment complex it owns. Because the company is buying more than 10 dishwashers, it is eligible for a $150-per-unit quantity discount. Financing charges total $20 per unit. The company gets $10 per dishwasher for the 15 dishwashers traded in. What is the final price the company will pay for each dishwasher (not the total cost) ?

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

Washburn Guitars recently purchased Parker Guitar, another guitar manufacturer that designs products for professionals and collectors, and will combine the two production facilities into a new location. Washburn expects the acquisition to reduce its rent and tax expenses by 40 percent, and the new skilled employees will reduce the hours of work needed for each unit by 15 percent. This would cause the slope of the total cost curve to __________ and the break-even quantity to __________.

Which of the following are elements of Step 3 in the price-setting process?

Break-even analysis refers to

In order to deliver a product that the average consumer can afford, Vizio

Tara is enrolled for spring semester at college. The tuition is $6,000, but she has a scholarship for $1,000 as well as a work-study grant of $1,500. The health fees and student activity fees are $150 for the semester. What is the final price that Tara will pay for the spring semester?

Three different objectives relate to a firm's profit, which is often measured in terms of return on investment. One objective, known as __________, is where a company gives up immediate profit in exchange for achieving a higher market share in the hopes of penetrating competitive markets.

The use of "special fees" and "surcharges" is driven by consumers' zeal for __________ combined with the ease of making price comparisons on the Internet.

A technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output is referred to as

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.

If you wanted to buy a McDonald's Big Mac, medium fries, and a medium drink separately, it will cost you $8.27. However, if you purchased these three items together as part of the firm's Extra Value Meal package, you would pay only $5.69, saving $2.58. This Extra Value Meal price serves as __________ to you and other consumers, who compare the costs and benefits of substitute items to a bundle containing those items.

If a McDonald's menu board advertises Mini Meals under $3, McDonald's is most likely using which type of pricing strategy?

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

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