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