Chapter 14 IBM 301

Price is the _____________ a consumer is willing to make to acquire a specific product or service. amount of money overall sacrifice fixed cost target return variable cost

B

A reference price is the actual price. the manufacturer's cost. the price against which buyers compare the actual selling price. a cumulative quantity discount price. the external horizontal fixed price.

C

The more substitutes that exist in a market, the lower the price elasticity for each product. the greater the income elasticity for each product. the easier it will be to utilize a target profit pricing strategy. the more sensitive consumers will be to changes in the price of a particular product. the more likely the market will be characterized as an oligopoly.

D

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 an indicator of quality. a reflection of status quo pricing. an indicator of the variety. a measure of scarcity. a measure of the income effect.

a

_________________ measures consumers' sensitivity to price changes. Cross-price elasticity of demand Price elasticity of demand Income elasticity of demand Inelastic demand price parity Competitive profit elasticity of demand

b

Gray markets can be a challenge to marketers because they are just as illegal as black markets. they may tarnish the manufacturer's image. they may tarnish the manufacturer's image. consumers are against them, but retailers support them. they may result in price increases across the board.

b and c

For which of the following is demand likely to be least sensitive to price increases? spring break vacations a specific brand of cereal prescription drugs theater tickets restaurant meals

c

If a 1 percent decrease in price results in more than a 1 percent increase in quantity demand, demand is cross-price elastic. price inelastic. price elastic. status quo elasticity. derived demand inelastic.

c

Variable costs change with changes in fixed costs. changes in cross-price elasticity. changes in target return pricing. changes in the quantity being produced. competitive parity.

d

Charging a relatively high price for new and innovative products to those consumers most willing and able to pay the high price is called price penetration bundling fixing referencing skimming

e

If the price for a product increases, the demand for the complementary product will decrease increase stay the same become more elastic become more inelastic

increases