MKT300 Ch 19 Questions

A company's rental of production space is an example of a _______. a. fixed cost b. marginal cost c. variable cost d. total cost e. breakeven point

a. fixed cost

Price is a key element in the marketing mix because it relates directly to the generation of total _______. a. revenue b. elasticity of demand c. market share d. profits e. price competition

a revenue

ACME Corp. offers a price discount to encourage prompt payment. Which of the following is it likely to use? a. Cash discount b. Trade discount c. Allowance d. Quantity discount e. Seasonal discount

a. Cash discount

Which of the following is NOT one of the factors that influence the assessment of value? a. Motivations to use available information about prices b. Elasticity of demand c. Time constraints d. Perceived quality e. Price levels

b Elasticity of demand

Which of the following is the point at which the costs of producing a product equals the revenue made from selling the product? a. Marginal revenue b. Breakeven point c. Marginal cost d. Fixed cost e. Demand curve

b. Breakeven point

Maria is concerned about both price and quality of a product. Marketers would best describe her as which of the following? a. Utility-sensitive b. Value-conscious c. Prestige-sensitive d. Price-conscious e. Price-obsessed

b. Value-conscious

A price developed in the buyer's mind through experience with the product is a(n) _______. a. breakeven point b. internal reference price c. external reference price d. trade discount e. experience price

b. internal reference price

To compete effectively on a price basis, a firm should _______. a. have the lowest market share b. have the highest quality c. be the low-cost seller of the product d. have the highest market share e. be the high-cost seller of the product

c be the low-cost seller of the product

Spacely Inc.'s sprockets have inelastic demand. If Spacely raises the price of sprockets, what will be the result? a. An increase in market share b. A decrease in product inventory c. An increase in total revenue d. A decrease in total revenue e. A decrease in market share

c. An increase in total revenue

Which of the following is calculated by dividing the variable costs by the number of units produced? a. Marginal cost b. Average total cost c. Average variable cost d. Average fixed cost e. Breakeven point

c. Average variable cost

The Federal Trade Commission (FTC) is investigating ACME Corp. for using misleading price tags at its outlet stores to deceive customers into believing they are getting a bargain on Wile E. branded items. Which of the following does the FTC believe ACME is guilty of? a. Price discrimination b. Price competition c. Deceptive pricing d. Price fixing e. Nonprice competition

c. Deceptive pricing

Which of the following pass on to a business customer the cost savings gained through economies of scale? a. Seasonal discounts b. Cash discounts c. Quantity discounts d. Trade discounts e. Allowances

c. Quantity discounts

Which of the following charges the same price to all customers regardless of geographic location, and the price is based on average shipping costs for all customers? a. Base-point pricing b. Zone pricing c. F.O.B. destination pricing d. Uniform geographic pricing e. Freight absorption pricing

d. Uniform geographic pricing

Which of the following is a major advantage of nonprice competition? a. Exceeding the breakeven point b. Fostering a value-conscious mindset c. Building market share d. Building customer loyalty toward the brand e. Fostering a price-conscious mindset

e Fostering a price-conscious mindset

ACME Corp. and Spacely Inc. are engaged in intense price competition in order to boost market share of their widgets. This is best described as _______. a. nonprice competition b. bartering c. price discrimination d. elasticity of demand e. a price war

e a price war

ACME Corp.'s widgets have elastic demand. If ACME raises the price of widgets, what will be the result? a. An increase in total revenue b. A decrease in product inventory c. A decrease in market share d. An increase in market share e. A decrease in total revenue

e. A decrease in total revenue

Which of the following shows the quantity of products a firm expects to sell at various prices if other factors remain constant? a. Breakeven point b. Demand line c. Marginal analysis d. Reference price e. Demand curve

e. Demand curve