1.Customers are likely to be less price sensitive when:

the greater the total expenditure.

the greater their share of the cost.

the greater the significance of the end benefit.

the easier it is to compare prices.

None of the above.

2. Mercedes, the European luxury car maker, does not mention price in its magazine advertising. Instead, the ad copy focuses on the quality and performance of the Mercedes product line. What pricing objective is Mercedes pursuing?

Status quo

Price flexibility

Nonprice competition

Introductory price deal

Bundling

3. Average fixed costs:

increase as the quantity produced increases.

decline for a while as output increases and then begin to rise again.

decrease steadily as output increases.

are less than average variable costs at all output levels.

Both C and D.

4. The majority of U.S. firms use a one-price policy

to broadcast a single price to competitors.

for administrative convenience.

to increase pricing flexibility.

to undercut competition.

to ward off competition from imports.