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- 1. Multiple Choice
________ is the amount of money charged for a product or service.
Experience curve
Demand curve
Price
Wage
Salary
- 2. Multiple Choice
________ uses buyers' perceptions of what a product is worth, not the seller's cost, as the key to pricing.
Value-based pricing
Target return pricing
Variable costs
Price elasticity
Product image
- 3. Multiple Choice
When there is price competition, many companies adopt ________ rather than cutting prices to match competitors.
pricing power
value-added pricing strategies
fixed costs
price elasticity
image pricing
- 4. Multiple Choice
Which of the following presents the strongest reason that markup pricing generally does NOT make sense?
Sellers earn a fair return on their investment.
By tying the price to cost, sellers simplify pricing.
When all firms in the industry use this pricing method, prices tend to be similar.
This method ignores demand.
With a standard markup, consumers know when they are being overcharged.
- 5. Multiple Choice
With target costing, marketers will first ________ and then ________.
build the marketing mix; identify the target market
identify the target market; build the marketing mix
design the product; determine its cost
use skimming pricing; use penetrating pricing
determine a selling price; target costs to ensure that the price is met
- 6. Multiple Choice
Each of the following economic factors can have a strong impact on a firm's pricing strategy EXCEPT ________.
an economic boom
the reseller's reaction to price changes
an economic recession
inflation
interest rates
- 7. Multiple Choice
Which of the following would NOT support a market-skimming policy for a new product?
The product's quality and image must support its higher price.
Enough buyers must want the products at that price.
Competitors are not able to undercut the high price.
Competitors can enter the market easily.
The cost of producing a smaller volume is not so high that it negates the advantage of charging more per unit.
- 8. Multiple Choice
Companies involved in deciding which items to include in the base price and which to offer as options are engaged in ________ pricing.
product bundle
optional-product
captive-product
by-product
skimming
- 9. Multiple Choice
It is most typical for producers who use captive-product pricing to set the price of the main product ________ and set ________ on the supplies necessary to use the product.
low; low markups
high; low markups
low; high markups
high; high markups
moderately; moderate markups
- 10. Multiple Choice
The New Age Gallery has different admission prices for students, adults, and seniors. All three groups are entitled to the same services. This form of pricing is called ________.
time-based pricing
location pricing
customer-segment pricing
revenue management pricing
generational pricing
- 11. Multiple Choice
What type of pricing is being used when a company temporarily prices its product below the list price or even below cost to create buying excitement and urgency?
segmented pricing
psychological pricing
referent pricing
promotional pricing
dynamic pricing
- 12. Multiple Choice
The Internet offers ________, where the price can easily be adjusted to meet changes in demand.
captive pricing
dynamic pricing
basing-point pricing
price bundling
cost-plus pricing
- 13. Multiple Choice
Consumers perceptions of the product's value set the ceiling; demand set a floor to a product's price.
TRUE
FALSE
- 14. Multiple Choice
Overhead cost is another term for variable cost.
TRUE
FALSE
- 15. Multiple Choice
When Johnny On the Spot, a house mover, sells boxes and pads that must be used in moving a household’s furniture, the company is practicing by-product pricing.
TRUE
FALSE
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