BUSML 3250 Ch. 20 quiz

The three primary bases for developing prices are a. negotiation, bidding, and demand-based. b. demand, competition, and cost. c. markup, cost, and cost-plus. d. supply, demand, and marketing objectives. e. profit, demand, and competition.

b. demand, competition, and cost.

Pricing the basic product in a product line low while pricing products that go with the basic product at a higher level is called a. price skimming. b. price lining. c. bait pricing. d. premium pricing. e. captive pricing.

e. captive pricing.

When products in an industry are relatively homogeneous and price is a key purchase consideration, a. firms tend to use secondary-market pricing. b. demand-based pricing dominates pricing decisions. c. customary pricing is often used. d. cost-based methods like markup pricing are dominant. e. competition-based pricing becomes more important.

e. competition-based pricing becomes more important.

A product is a price leader when a. its price maximizes profits. b. an increase or decrease in price leads to increased revenue or lower costs. c. it is sold at the highest price. d. its price leads the industry in sales. e. it is sold at less than cost in the hope that sales of other products will increase.

e. it is sold at less than cost in the hope that sales of other products will increase.

If a business decides to reduce its prices once in a while on an unsystematic basis, it is using a. psychological pricing. b. periodic discounting. c. everyday low pricing. d. price skimming. e. random discounting.

e. random discounting.