Ch. 9 Quiz

D. Customer​ value-based pricing

​________ refers to setting price based on​ buyers' perception of value rather than on the​ seller's cost. A. ​Cost-based pricing B. ​Good-value pricing C. ​Value-added pricing D. Customer​ value-based pricing E. Cost

C. promotional

A retailer temporarily prices a few select items below cost to create excitement and pull consumers into the store. This is an example of​ _________ pricing. A. geographical B. segmented C. promotional D. optional product E. psychological

C. market-skimming

When Apple Computer Company introduced its​ iPhone, its priced the new product at​ $599, considerably higher than either their iPod or competing cellular phones. Apple Computer was pursuing a​ ___________________ new product pricing​ strategy. A. ​by-product B. ​captive-product C. ​market-skimming D. ​optional-product E. ​market-penetration

D. product line

The Ford Mustang is offered in several different models. Ford will use​ __________ pricing to determine the price steps between the different models. A. ​optional-product B. ​captive-product C. ​product-bundle D. product line E. ​two-part pricing

D. Zone pricing

UPS charges different prices for shipping depending on an​ item's destination. The more distant the city the package is being shipped​ to, the higher the price UPS charges. Which geographic pricing method is UPS​ using? A. ​Freight-absorption pricing B. ​Base-point pricing C. ​Uniform-delivered pricing D. Zone pricing E. FOB origin

D. an indicator of quality

Margaret 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. an indicator of geographic pricing D. an indicator of quality E. a limited time offer

C. win a large market share

One major objective associated with a​ market-penetration pricing strategy is to​ ________. A. attract buyers willing to pay a higher price B. prevent customer dissatisfaction C. win a large market share D. skim off small but profitable market segments E. avoid everyday low pricing

C. price fixing

Over the​ years, U.S. air carriers have been accused numerous times of collusion when setting prices. This illegal practice is called​ _______. A. deceptive pricing B. price discrimination C. price fixing D. predatory pricing E. retail price maintenance

C. predatory pricing

Selling below cost with the intention of punishing a competitor or gaining higher​ long-run profits by putting competitors out of business is an illegal practice called​ _______. A. price discrimination B. deceptive pricing C. predatory pricing D. price fixing E. price maintenance

B. Reduce price

Which of the following is a potentially effective action a company could take in response to a​ competitor's price​ cut? A. Launch a​ high-price "fighter​ brand" B. Reduce price C. Decrease perceived value D. Raise price E. Reduce both price and quality.

B. Breakeven pricing

Which of the following is a​ cost-oriented pricing​ approach? A. EDLP pricing B. Breakeven pricing C. Value added pricing D. ​Competition-based pricing E. ​High-low pricing

C. If demand is​ elastic, sellers will consider lowering their price.

Which of the following is true regarding the​ price-demand relationship? A. A demand curve shows the number of units a company will produce in a given time period at different prices that might be charged. B. If demand is​ inelastic, a small change in price will result in a large change in demand. C. If demand is​ elastic, sellers will consider lowering their price. D. Price elasticity measures how responsive price will be to a change in demand. E. Demand and price are directly related dash- the higher the​ price, the greater the demand.

A. Cutting prices in an industry loaded with excess capacity may lead to price wars.

Which of the following statements is true regarding initiating price​ cuts? A. Cutting prices in an industry loaded with excess capacity may lead to price wars. B. When faced with falling​ demand, firms should not cut prices. C. If faced with excess​ capacity, a firm should not cut its price. D. Cutting price has no effect on costs. E. Firms never cut​ prices; they only raise them.

E. Wherever​ possible, the company should consider ways to meet higher costs or demand without raising prices.

Which of the following statements is true regarding initiating price​ increases? A. Cost inflation is not a factor in price increases. B. Price increases do not impact profits. C. Companies do not need to communicate reasons for price increases to customers. D. Prices should be increased when there is a lack of demand. E. Wherever​ possible, the company should consider ways to meet higher costs or demand without raising prices.

E. Value-added pricing

​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. ​Cost-plus pricing B. ​High-low pricing C. EDLP pricing D. Breakeven pricing E. ​Value-added pricing