Question 1

Total cost is

Accepted Answer

A)   the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold.
B)   the change in expenses that results from producing and marketing one additional unit of a product.
C)   the average amount of money received for selling one unit of a product or simply the price of that unit.
D)   the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold.
E)   the total expense incurred by a firm in producing and marketing a product, which equals the sum of fixed cost and variable cost.F) B) and C)
G) C) and E)

Question 2

Barter is the practice of exchanging products and services for other products and services rather than for

Accepted Answer

A)   value.
B)   ideas.
C)   promises.
D)   tariffs.
E)   money.F) B) and C)
G) A) and E)

Question 3

Another name for a dynamic price policy is

Accepted Answer

A)   target pricing.
B)   fluid pricing.
C)   price lining.
D)   market-based pricing.
E)   a flexible-price policy.F) A) and B)
G) C) and D)

Question 4

Figure 11-2
-Figure 11-2 above represents the four approaches to selecting an appropriate price level. Box D includes customary and loss leader so it represents which approach?

Accepted Answer

A)   competition-oriented approach
B)   cost-oriented approach
C)   profit-oriented approach
D)   results-oriented approach
E)   demand-oriented approachF) C) and D)
G) B) and D)

Question 5

Which of the following is a cost-oriented approach to pricing?

Accepted Answer

A)   standard markup pricing
B)   skimming pricing
C)   prestige pricing
D)   loss-leader pricing
E)   bundle pricingF) All of the above
G) D) and E)

Question 6

The ratio of the firm's sales revenues or unit sales to those of the industry (competitors plus the firm itself)  is referred to as

Accepted Answer

A)   target return on sales.
B)   industry profit.
C)   unit volume.
D)   market share.
E)   profit.F) B) and E)
G) All of the above

Question 7

A shift of the demand curve from D1 to D2 in Figure 11-3b above indicates

Accepted Answer

A)   fewer units are demanded at the given price.
B)   more units are demanded at the given price.
C)   the price has decreased.
D)   the price has increased.
E)   there is not enough information given to indicate what happened.F) D) and E)
G) A) and B)

Question 8

The newer a product and the earlier it is in its life cycle,

Accepted Answer

A)   the lower the price the firm must charge.
B)   the more competition it has.
C)   the higher is the price that can usually be charged.
D)   the lower its production costs are.
E)   the lower its unit variable cost is.F) B) and D)
G) A) and E)

Question 9

Figure 11-7
-Suppose you are the owner of a picture frame store. Let's assume that the average price customers are willing to pay for each picture frame is $120. Also, suppose your fixed costs (FC)  total $32,000 (real estate taxes, interest on a bank loan, etc.)  and unit variable cost (UVC)  for a picture frame is $40 (labor, glass, frame, and matting) . Figure 11-7a above shows that by selling 800 picture frames, you will

Accepted Answer

A)   break even.
B)   earn a profit.
C)   incur a loss.
D)   have no fixed costs.
E)   have no variable costs.F) A) and B)
G) A) and C)

Question 10

Family Dollar Stores, like Dollar Value Stores and 99¢ Only Stores, use what type of pricing policy?

Accepted Answer

A)   dynamic pricing
B)   customary pricing
C)   flexible pricing
D)   one-price
E)   at-market pricingF) D) and E)
G) B) and E)

Question 11

Many cosmetology schools allow their advanced students to style hair for "real-world" clients for a reduced fee. The students benefit from the experience, the clients get a less expensive haircut, and the school is able to provide students with additional training without costing it anything; in fact, they even profit from it. This is an example of

Accepted Answer

A)   value-pricing.
B)   societal pricing.
C)   revenue sharing.
D)   barter.
E)   cost-assist pricing.F) D) and E)
G) None of the above

Question 12

Total revenue is

Accepted Answer

A)   the profit made from selling a product or service.
B)   the net gain in sales if the unit price is lowered.
C)   the least number of units sold needed to cover product, distribution, and promotional costs.
D)   the amount at which marginal costs exceed fixed costs.
E)   the total money received from the sale of a product.F) A) and D)
G) All of the above

Exam 11: Pricing Products and Services

The ratio of the firm's sales revenues or unit sales to those of the industry (competitors plus the firm itself) is referred to as

Correct Answer
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Correct Answer
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Barter is the practice of exchanging products and services for other products and services rather than for

Correct Answer
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The newer a product and the earlier it is in its life cycle,

Correct Answer
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Which of the following is a cost-oriented approach to pricing?

Correct Answer
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Correct Answer
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Total cost is

Correct Answer
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Family Dollar Stores, like Dollar Value Stores and 99¢ Only Stores, use what type of pricing policy?

Correct Answer
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Total revenue is

Correct Answer
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A shift of the demand curve from D1 to D2 in Figure 11-3b above indicates

Correct Answer
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Figure 11-2 -Figure 11-2 above represents the four approaches to selecting an appropriate price level. Box D includes customary and loss leader so it represents which approach?

Correct Answer
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Another name for a dynamic price policy is

Correct Answer
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Exam 11: Pricing Products and Services

The ratio of the firm's sales revenues or unit sales to those of the industry (competitors plus the firm itself) is referred to as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Barter is the practice of exchanging products and services for other products and services rather than for

Correct AnswerverifiedShow Answer

The newer a product and the earlier it is in its life cycle,

Correct AnswerverifiedShow Answer

Which of the following is a cost-oriented approach to pricing?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Total cost is

Correct AnswerverifiedShow Answer

Family Dollar Stores, like Dollar Value Stores and 99¢ Only Stores, use what type of pricing policy?

Correct AnswerverifiedShow Answer

Total revenue is

Correct AnswerverifiedShow Answer

A shift of the demand curve from D1 to D2 in Figure 11-3b above indicates

Correct AnswerverifiedShow Answer

Figure 11-2 -Figure 11-2 above represents the four approaches to selecting an appropriate price level. Box D includes customary and loss leader so it represents which approach?

Correct AnswerverifiedShow Answer

Another name for a dynamic price policy is

Correct AnswerverifiedShow Answer

Correct Answer
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