Week Six Exam

Consumers rely less on price to judge the quality of a product when they ________.

have prior experience with the product

Which of the following would most likely trigger a price increase?

Cost inflation

Establishing prices for razor blades that must be used with a razor blade system is known as

Captive-product

Which of the following sets the price ceiling for a product's price ?

Consumer perceptions of value

The Royal Ontario Museum has different admission prices for students, adults, and seniors. All three groups are entitles to the same services. This form of pricing is called

Customer - segment

The Vitamin Shoppe sells natural vitamins and supplements. Product prices are adjusted frequently to meet the needs of individual customers. For example, long-time customers receive discounts. This strategy is most likely an example of __________ pricing.

Dynamic

Captive product pricing refers to setting prices across an entire product line

False

Competitive pricing is A variation of break-even pricing

False

Federal legislation on price-fixing states that sellers must set prices after talking to customers and competitors

False

Market penetration makes sense when a product's quality and image must support its higher price

False

Pricing strategies usually remain the same as a product passes through its life cycle

False

The demand curve shows the number of units the market will buy in a given time period at similar prices

False

Rent, electricity, and executive salaries that do not vary with production level are referred to as ________ costs.

Fixed

Retailers like Winners and Marshalls carry less-expensive versions of established brand name products or new lower price lines. They have adopted a ____________ pricing strategy.

Good -value

When demand hardly changes with a small change in the price of a product, then the demand for the product is best described as ________.

Inelastic

Which of the following statements about break even analysis is most likely true ?

It fails to consider customer value and the relationship between price and demand.

With each new generation of Apple IPhone, IPad , or Mac computer, new models start at a high price then work their way down as newer models are introduced. Apple initially uses a _________ strategy.

Market-skimming

There are more than 200 wild blueberry producers in Nova Scotia. An individual farmer cannot charge more than the going market price per unit without the risk of losing business to the other farmers. This is an example of _______.

Pure competition

______________ pricing is an approach whereby a firm tries to determine the price at which it will break even or earn the profit it is seeking

Target return

Which of the following conditions is most likely essential for implementing a successful market-penetration pricing strategy for a product?

The market for the product is highly price sensitive.

Which of the following conditions is most likely essential for implementing a successful market-skimming pricing strategy for a product ?

The product's quality and image support its high price.

__________ costs refer to the sum of the fixed and variable costs for any given level of production

Total

Dynamic pricing is particularly suitable for internet based companies like Amazon who want to e responsive to shoppers desires and marketplace changes

True

Price bundling promotes the sales of products consumers might not otherwise buy, but the combined price must be low enough to get them to buy the bundle

True

Sellers are prohibited from using predatory pricing

True

The Competition Act seeks to prevent unfair price discrimination by ensuring that sellers offer the same price terms to customers at a given level of trade

True

Under oligopolistic competition the market consists of only a few large sellers

True

Los Amigos, a new Mexican restaurant, has set up shop across the street from Hot Tamales and More. Which of the following pricing strategies will Los Amigos likely use?

competition-based