Chapter 10 quiz

price elasticity of demand.

A measure of price sensitivity that gives the percentage change in quantity demanded in response to a percentage change in price is known as

dynamic pricing.

A pricing strategy that involves constantly updating prices to reflect changes in supply, demand, or market conditions is called

odd pricing.

A pricing tactic in which a firm prices products a few cents below the next dollar amount is called

escalator clause.

A section in a contract that ensures that providers of goods and services do not encounter unreasonable financial hardship as a result of uncontrollable increases in the costs of or decreases in the availability of something required to deliver products to customers is referred to as a(n)

charging someone less than they are willing to pay.

According to your text, one of the most common mistakes in modern pricing is

price

According to your text, which of the elements of the marketing mix is one of the most watched and regulated activities?

large companies leveraging their buying power to purchase goods at lower prices than smaller companies.

All of the following are legal under the Robinson-Patman Act except

not very effective at maximizing profits.

As a pricing tactic, markup pricing is

china

As noted in your text, producers in which country were accused of dumping by selling silk at unreasonably low prices?

predatory pricing

Because it could be considered an attempt to create a monopoly, which pricing strategy is illegal under U.S. law but is difficult to prove?

underpricing

Charging someone less than they are willing to pay is a practice referred to as

the price they have to pay is more than they anticipated

Consumers will be more price sensitive when

intentionally misleading customers with price promotions.

Deceptive pricing involves

a company sells its exports to another country at a lower price than it sells the same product in its domestic market.

Dumping occurs when

costs that remain constant and do not vary based on the number of units produced or sold. The cost of materials needed to produce a product varies with the amount being produced and is therefore not a fixed cost.

Fixed costs

seasonal discounts

If a resort wanted to promote visitors to come during its off-peak times, it would most likely choose which pricing tactic?

prestige pricing

If luxury brands such as Versace clothing, Lexus automobiles, and Dom Perignon champagne wanted to promote an image of superior quality and exclusivity to customers, they would most likely use which pricing tactic?

determine the costs.

In the price-setting process, the next step after demand has been evaluated is to

cost-plus pricing

One of the most commonly used pricing tactics, markup pricing, is also referred to as

percentage change in quantity demanded in response to a percentage change in price.

One of the most important concepts in marketing is the price elasticity of demand, which is the

pricing

One of the most important strategic decisions a firm faces is _______ because it reflects the value the product delivers to consumers as well as the value it captures for the firm.

pricing a product higher than competitors to signal that it is of higher quality.

Prestige pricing involves

40%

Recent research indicates that approximately _______ of consumers search for and purchase a low-priced product using an in-store shopping app or online search engine.

reference price.

Since consumers have the tendency to compare prices on almost everything they buy, marketers setting prices should attempt to capitalize on this tendency by determining the price consumers will consider fair and reasonable for a product. This is known as the

requires sellers to charge everyone the same price for a product.

The Robinson-Patman Act was passed in 1936 and

profit margin.

The amount a product sells for above the total cost of the product itself is called

price sensitivity.

The degree to which the price of a product affects consumers' purchasing behavior is referred to as

define the pricing objectives

The first step in the price-setting process is to

determine objectives

The first step in the price-setting process is to

black market.

The illegal buying and selling of products outside of sanctioned channels is referred to as the

price discrimination.

The practice of charging different customers different prices for the same product is called

separating out the individual goods that make up a product and pricing each one individually.

The price strategy of unbundling involves

gray market.

The sale of branded products through legal but unauthorized distribution channels is referred to as the

dumping

The strategy in which a company sells its exports to another country at a lower price than it sells the same product in its domestic market is referred to as

costs that vary depending on the number of units produced or sold. These costs include things such as raw material, sales commissions, and delivery costs.

Variable costs

penetration pricing

Volume maximization is also referred to as

prestige pricing and dynamic pricing

What are two of the most common and effective strategies marketers can use for raising prices?

In an industry in which there are many buyers and sellers, the pricing impact of any single firm will be fairly small.

What can be said regarding the role of industry structure on setting price?

the change in total revenue that results from selling one additional unit of a product

What is marginal revenue?

wireless apps

What technological advancement created for mobile devices has unleashed a new era of pricing transparency for consumers?

the process of calculating the sales volume needed to achieve a profit of zero

Which of the following accurately describes break-even analysis?

the Federal Trade Commission Act

Which of the following established the Federal Trade Commission, giving it the authority to enforce laws aimed at prohibiting unfair methods of competition?

the absence of tariffs

Which of the following has allowed for easier import/export transactions between the United States, Mexico, and Canada?

the Wheeler-Lea Act

Which of the following is also called the Advertising Act?

salespeople

Which of the following provides the best source of information for marketers regarding how high they can price a product before customers stop considering the product a good value?

does not measure price sensitivity

Which of the following statements regarding break-even analysis is true?

Pricing strategies should be reevaluated throughout the product life cycle.

Which of the following statements regarding pricing is true?

Gray market goods allow consumers to purchase items for less than they could normally.

Which of the following statements regarding the gray market is true?

Revenue

Yield management is a strategy for maximizing a firm's

Revenue; profit

_______ is calculated by multiplying units sold by price, whereas ______ is calculated by subtracting costs from revenue.

Pricing is a critical component of a successful global marketing strategy and firms face unique challenges related to global pricing, including the gray market, tariffs, and dumping.

global pricing

Taxes on imports and exports between countries are called

tariffs

vary depending on the number of units produced or sold.

variable costs are defined as costs that

it benefits the consumer more than the firm.

disadvantage of using a price bundling strategy