Chapter 9
When, if ever, is price discrimination allowed?
If the seller can prove that its costs are different when selling to different retailers, then it is legal.
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.
premium pricing
Which of the following is true regarding the price-demand relationship?
If demand is elastic, sellers will consider lowering their prices.
Of the following, which is true about pricing?
Price competition is a core element of our free-market economy.
Which of the following refers to setting prices based on buyers' perception of value rather than on the seller's cost?
customer value based pricing
Continually adjusting prices to meet the characteristics and needs of individual customers and situations is known as _______________________.
dynamic pricing
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.
predatory 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 ______________________.
price discrimination
When sellers set prices in conjunction or collaboration with one another, this illegal practice is known as _______________.
price fixing
Bath & Body Works uses _____________ pricing when the company offers "three-fer" deals on its products (such as soaps, lotions, and moisturizers).v
product bundle
The Ford Mustang is offered in several different models. Ford uses __________ pricing to determine the price steps between the different models.
product line
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?"
target costing
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?
value added pricing
________________________ is one major objective associated with a market-penetration pricing strategy.
winning large market share
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.
zone pricing