Ch. 10 Quiz Questions

If demand hardly changes with a small change in​ price, the demand is​ ________. A. highly elastic B. variable C. derived D. inelastic E. negative

inelastic

In​ 2011, the fixed costs of a company were​ $500,000, and its variable costs equaled​ $150,000. In​ 2010, the company made an annual profit of​ $200,000. It has been predicted​ that, despite a steady​ growth, the​ company's variable costs will likely equal​ $300,000 by 2013. The total costs of the company in 2011 were​ ________. A. $450,000 B. $350,000 C ​$650,000 D. $800,000 E. $950,000

$650,000

A company faces fixed costs of​ $100,000 and variable costs of​ $8 per unit. It plans to directly sell its product in the market for​ $12. How many units must it produce and sell to break​ even? A. 40,000 B. 30,000 C. 25,000 D. 20,000 E. 35,000

25,000

Which of the following statements is true regarding​ costs? A. Totals costs are the sum of​ long-run average costs and​ short-run average costs. B. Costs do not vary with different levels of production. C. Variable costs vary directly with the level of sales. D. Average cost tends to decrease with accumulated production experience. E. Experience curve pricing is a low risk strategy.

Average cost tends to decrease with accumulated production experience

Which of the following correctly identifies the three major pricing strategies used by​ marketers? A. Customer valuedash-based ​pricing, revenue-based​ pricing, and​ profit-based pricing B. Customer valuedash-based ​pricing, cost-based​ pricing, and​ profit-based pricing C. Customer valuedash-based ​pricing, cost-based​ pricing, and​ revenue-based pricing D. Customer valuedash-based ​pricing, revenue-based​ pricing, and​ competition-based pricing E. Customer valuedash-based ​pricing, cost-based​ pricing, and​ competition-based pricing

Customer valuedash-based ​pricing, cost-based​ pricing, and​ competition-based pricing

Which factor sets the ceiling on setting a​ product's price? A. Revenue B. Customer's value perceptions C. Competitors D. Demand E. Company costs

Customer's value perceptions

Which of the following statements about price is​ correct? A. Marketers do not a have lot of flexibility in setting and changing price. B. Pricing is not a problem for marketing executives. C. Price is not an important competitive asset. D. Prices have no impact on a​ firm's bottom line. E. Customers have put increasing pricing pressures on many companies.

Customers have put increasing pricing pressures on many companies

Which of the following is true regarding the price-demand ​relationship? A. If demand is​ inelastic, a small change in price will result in a large change in demand. B. Price elasticity measures how responsive price will be to a change in demand. C. A demand curve shows the number of units a company will produce in a given time period at different prices that might be charged. D. If demand is​ elastic, sellers will consider lowering their price. E. Demand and price are directly relatedlong dash—the higher the​ price, the greater the demand.

If demand is​ elastic, sellers will consider lowering their price

Which of the following statements regarding customer value-based pricing is​ correct? A. This strategy is seldom used because buyers rarely consider perceived value when evaluating a​ product's price. B. Using this​ strategy, marketers first design the product and marketing​ program, then set the price. C. In using this​ strategy, companies often find it hard to measure the value customers attach to their product. D. Customer valuedash-based strategy begins with determining product costs. E. Using this​ strategy, marketers must convince buyers that the​ product's value at that price justifies its purchase.

In using this​ strategy, companies often find it hard to measure the value customers attach to their product

Which type of market consists of many buyers and sellers trading over a range of prices rather than a single market​ price? A. Uniform commodities B. Pure monopoly C. Monopolistic competition D. Oligopolistic competition E. Pure competition

Monopolistic competition

Which factor sets the floor on setting a​ product's price? A. Revenue B. Demand C. Customer's value perceptions D. Competitors E. Product costs

Product costs

In which type of market does no buyer or seller have much impact on setting the going market​ price? A. B2B market B. Monopolistic competition C. Oligopolistic competition D. Pure monopoly E. Pure competition

Pure competition

What is target​ costing? A. Setting a price and then setting costs that will ensure that the price is met B. Basing price on customer perceptions of cost C. Pricing products without any consideration to costs D. Designing a​ product, then determining its cost and price E. Setting acceptable costs and then setting the price

Setting a price and then setting costs that will ensure that the price is met

How is price determined using​ cost-plus pricing? A. The price is set by adding a standard​ mark-up to the cost of the product. B. The price is set by determining the​ customer's value perceptions. C. The price is set based on demand. D. The price is set so that total revenue covers total costs. E. The price is set based on​ competitor's prices.

The price is set by adding a standard​ mark-up to the cost of the product

​New, premium movie theaters offer features such as online reserved​ seating, high-backed leather executive chairs with armrests and​ footrests, the latest in digital sound and​ super-wide screens, and other amenities for which they charge a higher price. This is an example of which type of​ pricing? A. Value-added pricing B. EDLP pricing C. ​Cost-plus pricing D. High-low pricing E. Break-even pricing

Value-added pricing

​DivetheBlue, a company marketing​ deep-sea diving​ equipment, charges very high prices for its products. Despite the availability of many​ low-priced products in the​ market, customers seem to prefer​ DivetheBlue, which has earned a reputation for selling​ high-quality products. This exemplifies​ ________. A. a nonprice position B. a pure monopoly C. ​break-even pricing D. target costing E. an oligopoly

a nonprice position

Companies with lower costs​ ________. A. usually market products with inferior​ quality, thereby justifying the low selling price B. usually set higher prices that result in higher margins C. specialize in selling products with​ value-added features D. tend to overprice products owing to their monopolistic advantage E. can set lower prices that result in smaller margins but greater sales and profits

can set lower prices that result in smaller margins but greater sales and profits

The perceived value of different product offers can be reasonably assessed by​ ________. A. conducting a SWOT analysis B. preparing demand curves C. collecting data about​ competitors' offers D. conducting surveys and experiments E. setting a benchmark for product quality

conducting surveys and experiments

Which of the following processes does​ value-based pricing​ reverse? A. high-low pricing B. value-added pricing C everyday low pricing D. cost-based pricing E. good-value pricing

cost-based pricing

Which of the following shows the number of units the market will buy in a given time​ period, at different prices that might be​ charged? A. supply curve B. demand curve C. break-even pricing D. target costing E. learning curve

demand curve

Underpriced products​ ________. A. produce more revenue than they would if they were priced at the level of perceived value B. are characterized by rapidly declining demand C. mostly offer higher value than those with a high markup price D. sell poorly in the global marketplace E. produce less revenue than they would if they were priced at the level of perceived value

produce less revenue than they would if they were priced at the level of perceived value

Price is the only part of the marketing mix that​ __________. A. incurs costs B. produces revenue C. attracts buyers D. is defined by the consumer E. does not play a role in creating customer value

produces revenue

As a manufacturer increases the​ price, ________. A. efficiency drops B. the profit margin shrinks C. competition is minimized D. the total costs increase E. the​ break-even volume drops

the​ break-even volume drops

Internal factors that affect pricing include​ __________. A. the​ company's overall marketing​ strategy, objectives, and marketing mix B. the nature of the​ market, demand, and the economy. C. the​ company's overall marketing​ strategy, the nature of the​ market, and demand. D. the​ company's overall marketing​ strategy, objectives, and the nature of the market E. the​ company's overall marketing​ strategy, objectives, and demand

the​ company's overall marketing​ strategy, objectives, and marketing mix

The fixed cost in manufacturing a single LED monitor is​ $40 and the variable cost is​ $12. If the company expects to manufacture​ 5,000 monitors, the total costs would be​ ________. A. $60,000 B. $500,000 C. $420,000 D. $200,000 E. $260,000

​$260,000