CH 9 QUIZ
A company has set a low price on a new product it introduced. It wants to maximize its market share and attract a large number of buyers quickly. Which new product pricing strategy should the company use? A. product bundle pricing B. captive-product pricing C. psychological pricing D. market-penetration pricing . E. market-skimming pricing
market-penetration pricing
Of the following, which is true about pricing? A. Companies do not need to communicate reasons for price increases to customers. B. Companies have no obligation to consider broader societal pricing concerns. C. Federal law is the overriding authority on pricing. D. Price competition is a core element of our free-market economy. E. Companies usually are free to charge whatever prices they wish.
Price competition is a core element of our free-market economy.
The illegal practice of ______________________ is selling below cost with the intention of punishing a competitor or gaining higher long-run profits by putting competitors out of business. A. predatory pricing B. price-fixing C. price maintenance D. deceptive pricing . E. price discrimination
predatory pricing
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. If demand is elastic, sellers will consider lowering their prices. C. Price elasticity measures how responsive price will be to a change in demand. D. Demand and price are directly related long dash —the higher the price, the greater the demand. E. A demand curve shows the number of units a company will produce in a given time period at different prices that might be charged.
If demand is elastic, sellers will consider lowering their prices.
A variation of break-even pricing is ____________________, which uses the concept of a break-even chart that shows the total cost and total revenue expected at different sales volume levels. A. Competition-based pricing B. Everyday low pricing (EDLP) C. Target return pricing D. High-low pricing E. Value-added pricing
Target return pricing
Roshika has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host. Since she does not know much about wine, she will likely use the price of the wines as ________. A. a type of segmented pricing B. an indicator of the cost of production C. a limited-time offer D. an indicator of geographic pricing E. an indicator of quality .
an indicator of quality
UPS uses _________________, which charges different prices for shipping depending on an item's destination. The more distant the city where the package is being shipped, the higher the price UPS charges. A. zone pricing B. freight-absorption pricing C. free on board (FOB) origin . D. uniform-delivered pricing E. base-point pricing
zone pricing
Which of the following refers to setting prices based on buyers' perception of value rather than on the seller's cost? A. Good-value pricing B. Value-added pricing C. Cost-based pricing D. Customer value-based pricing E. Cost-plus pricing
Customer value-based pricing
Sadie's Restaurant has listened to its customers over the years and is now able to offer the right combination of quality and good service at a fair price. Which pricing strategy is Sadie's using? A. Break-even pricing B. Good-value pricing C. Cost-based pricing D. High-low pricing E. Value-added pricing
Good-value pricing
_ is one major objective associated with a market-penetration pricing strategy. A. Attracting buyers willing to pay a higher price B. Preventing customer dissatisfaction C. Skimming off small but profitable market segments D. Avoiding everyday low pricing E. Winning large market share
Winning large market share
When Apple introduced its iPhone X, it priced the new product at nearly $1,000, considerably higher than competing smart phones. Apple was pursuing a ___________________ new product pricing strategy. A. optional-product B. by-product C. captive-product D. premium pricing E. market-penetration
premium pricing
The Robinson-Patman Act seeks to ensure that sellers offer the same price terms to customers at a given level of trade to prevent ______________________. A. predatory pricing B. deceptive pricing C. price discrimination D. price-fixing E. retail price maintenance
price discrimination
When sellers set prices in conjunction or collaboration with one another, this illegal practice is known as _______________. A. predatory pricing B. deceptive pricing C. price-fixing D. retail price maintenance E. price discrimination
price-fixing
Which of the following reverses the usual process of first designing a new product, determining its cost, and then asking, "Can we sell it for that?" A. cost-plus pricing B. value-added pricing C. target costing D. EDLP . E. target return pricing
target costing
If the company has selected its target market and positioning carefully, then its marketing mix strategy, including price, will be fairly straightforward. Of the following, which is NOT one of the common pricing objectives? A. Supporting resellers and gaining their support B. Grabbing international market share C. Avoiding government intervention D. Preventing competition E. Customer retention and building profitable customer relationships
Grabbing international market share
When, if ever, is price discrimination allowed? A. If the seller can substantiate that it is distributing internationally, then it is legal. B. If the seller can prove that its revenue is affected when selling to similar retailers, then it is legal. C. If the seller can prove that its costs are different when selling to different retailers, then it is legal. D. If the seller is selling via the Internet as its main channel, then it is legal. E. If the seller can prove that it is allowable in certain states and local retailing areas, then it is legal.
If the seller can prove that its costs are different when selling to different retailers, then it is legal.
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
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, super-wide screens, and other amenities for which they charge a higher price. This is an example of which type of pricing? A. EDLP B. Breakeven pricing C. Value-added pricing D. Cost-plus pricing E. High-low pricing
Value-added pricing
Gillette charges a fairly low price for its razors (relative to costs) and a high price for razor blades. It is using a strategy of ___________ pricing. A. captive-product B. two-part C. product bundle D. by-product E. product line
captive-product
Continually adjusting prices to meet the characteristics and needs of individual customers and situations is known as _______________________. A. psychological pricing B. promotional pricing C. segmented pricing . D. dynamic pricing E. cash rebates
dynamic pricing
When a college or university charges more for out-of-state students than in-state students, it is practicing ______________________. A. customer-segment pricing B. location-based pricing C. time-based pricing D. promotional pricing E. product form pricing
location-based pricing
A car buyer can choose a base model at one price, or one with a premium sound and navigation system at a higher price. This is an example of _______ pricing. A. product line B. captive-product C. optional-product D. by-product E. product bundle
optional-product
Bath & Body Works uses _____________ pricing when the company offers "three-fer" deals on its products (such as soaps, lotions, and moisturizers). A. captive-product B. product line C. two-part D. product bundle E. by-product
product bundle
The Ford Mustang is offered in several different models. Ford uses __________ pricing to determine the price steps between the different models. A. product bundle B. two-part C. captive-product D. optional-product E. product line
product line
When a retailer temporarily prices a few select items below cost to create excitement and pull consumers into the store, it is practicing ___________________ pricing. A. promotional B. psychological C. geographical D. optional-product E. segmented
promotional
