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- 1. Multiple ChoiceIn a free market, prices are determined by:supply and wantsdemand and outputdemand and supplysupply and needs.
- 2. Multiple ChoiceWhen the price of most products increases, the demand for these products will be likely to:fallincreasestay the sameincrease and then remain constant.
- 3. Multiple ChoiceThe demand for Coke is most likely to be affected by which of the following changes?the price of Pepsi-Colathe supply of Coca-Colathe cost of producing Coca-Colaan increase in incomes of people who do not buy Coca-Cola
- 4. Multiple ChoiceThe price for a product rises 10%, product demand falls by a smaller proportion, which is true?The supply of the product is inelastic.Competitors have lowered their prices.Demand for the product is inelastic.Demand for the product is elastic.
- 5. Multiple ChoiceThe price of a product rises by 5% and the market supply rises by 20%. Which is true?Demand for the product is elastic.Supply is inelastic.Firms have been unable to increase output.Supply is elastic.
- 6. Multiple ChoiceWhen demand and supply are equal in a free market, which of the following is true?The price is at its equilibrium level.Price skimming is being used.Supply and demand are both elastic.Cost-plus pricing is being used.
- 7. Multiple ChoiceA firm is most likely to adopt a low price (penetration) strategy for a product when:sales are increasing rapidlycompetitors have just raised their pricesthe objective is to achieve a high market sharethe firm wants to establish a luxury image for the product.
- 8. Multiple ChoiceThe cost of making 1000 units is $500. What is the price if a profit mark-up of 50% is added?$150 cents$375 cents
- 9. Multiple ChoiceA firm aiming to create a luxury, quality clothes product image will use which pricing strategyprice penetrationprice skimmingcompetitive pricingcost-plus pricing.
- 10. Multiple ChoiceA shop has chairs that have been in stock for over a year. To sell them quickly it will use:promotional pricingprice skimmingequilibrium price
- 11. Multiple ChoiceA firm's pricing decision made for one of its products will influence all the answers except:sales of the productsales revenueprofit made by the businesscost of producing the product.
- 12. Multiple ChoiceA firm sells a product for $2. The cost of making the product was $1.50. The profit mark-up is?50%25%30%33.3%.
- 13. Multiple ChoiceAn oil company is keen to maintain market share. It is likely to use:price skimmingcompetitive pricingcost-plus pricing with a high mark-uppenetration pricing to start with and then price skimming.
- 14. Multiple ChoiceA supermarket buys in tins of soup for $2 each. It sells them for $3. The profit mark-up is:100%50%25%$3
- 15. Multiple ChoiceAll the following factors will be considered by a restaurant when pricing its menu except:the prices charged by local competitorsthe cost of the food suppliesthe type of market segment it is aiming to reachthe balance of payments deficit.
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