BUS 312 Chapter 10 Quiz
Which of the following is true regarding the price-demand relationship?
If demand is elastic, sellers will consider lowering their price.
A(n) __________ shows the number of units the market will buy in a given time period at different prices.
demand curve
The amount of money charged for a product is its __________.
price
The strategy of __________ means that the firm attempts to offer the right combination of quality and good service at a fair price.
good-value pricing
Retailers such as Macy's and JC Penney charge higher prices on an everyday basis, but run frequent promotions to lower prices temporarily on selected items. This is an example of __________.
high-low pricing
Luxury automobile manufacturers typically add quality, services, and other features to differentiate their offers and thus support their higher price. This is an example of __________.
value-added pricing
What is the first thing marketers must do when using value-based pricing?
Assess customer needs and value perceptions.
Which factor sets the floor on setting a product's price?
Product costs
Which of the following correctly identifies the three major pricing strategies used by marketers?
Customer value-based pricing, cost-based pricing, and competition-based pricing
Which type of market consists of many buyers and sellers trading over a range of prices rather than a single market price?
Monopolistic competition
How is price determined using cost-plus pricing?
The price is set by adding a standard mark-up to the cost of the product.
Which of the following statements is correct regarding different types of markets?
Under oligopolistic competition each seller is alert and responsive to competitors' pricing strategies and marketing moves.
In which type of market does no buyer or seller have much impact on setting the going market price?
Pure competition
What is target costing?
Setting a price and then setting costs that will ensure that the price is met
Which of the following statements is true regarding costs?
Average cost tends to decrease with accumulated production experience.
On a break-even chart, the break-even volume is located __________.
at the intersection of total revenue and total costs
Two external factors which must be considered in pricing decisions are __________.
demand and the nature of the market
Which of the following is a cost-based pricing approach?
Break-even pricing
Which factor sets the ceiling on setting a product's price?
Customer's value perceptions
Beyond the nature of the market, demand, and the economy, what other factors in a firm's external environment must a company consider when setting prices?
Resellers, the government, and social concerns
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?
Value-added pricing
Which of the following statements about price is correct?
Customers have put increasing pricing pressures on many companies.
Which of the following statements regarding customer value-based pricing is correct?
In using this strategy, companies often find it hard to measure the value customers attach to their product.
Price is the only part of the marketing mix that __________.
produces revenue
Internal factors that affect pricing include __________.
the company's overall marketing strategy, objectives, and marketing mix