1. Bob's company SteadyWind is entering the market of bladeless fans. When creating his prices, Bob looks at the prices of bladeless fans currently on the market. Bob is assessing the influence of _______ on pricing strategy.
A. odd-even prices
B. improvement value
C. everyday low pricing
D. reference prices
2. Offering a size discount to consumers can benefit a business because it ensures that the consumers
A. won't fall prey to predatory pricing.
B. will be less likely to switch brands.
C. capitalize on the experience curve effect.
D. earn a cash discount.
3. Gray markets can be challenging to marketers because they
A. are legal only in select states.
B. may smear the manufacturer's image.
C. are just as illegal as black markets.
D. lack consumer support.
4. Break-even analysis
A. assumes fixed costs are zero.
B. tells marketers only what price is needed to break even.
C. can't adjust for high variable costs.
D. assumes that there's only one price.
5. If a one-percent decrease in price results in more than a one-percent increase in quantity demand, demand is
A. derived demand inelastic.
B. price inelastic.
C. cross-price elastic
D. price elastic.
6. The _______ is the ratio of the percentage change in demanded quantity to the percentage change in price.
A. income elasticity of demand
B. break-even point
C. supply curve
D. price elasticity of demand
7. Jacob rents rooms in his hotel for an average of $100 per night. The variable cost per rented room is $15. His fixed costs are $100,000, and his profit last year was $20,000. For Jacob, the contribution per unit is
A. $85.
B. $100.
C. $1000.
D. $20,000.
8. Labor, materials, and energy are typically _______ costs.
A. inelastic
B. fixed
C. variable
D. incidental
9. Traditional demand-curve economic theory is used by marketers to understand _______ in the five Cs of pricing.
A. customers
B. competitors
C. channel members
D. cost
10. Ranjit and Maya line up outside major appliance stores every Black Friday to wait for the best deals on big-ticket items. Ranjit and Maya would most likely respond to which pricing strategy?
A. Slotting
B. Premium
C. High/low
D. Price skimming
11. _______ measures consumers' sensitivity to changes in how much is charged for an item.
A. Income elasticity
B. Price elasticity of demand
C. Cross-price elasticity of demand
D. Competitive price demand
12. Hilda estimates the average cost of her scented candles is $11 regardless of how many candles she makes on that day. She adds a standard markup to the $11 estimate to determine her price. Which pricing method is Hilda using?
A. Reference-based
B. Cost-based
C. Improvement value
D. Value-based
13. Which of the following markets is most likely to be characterized by oligopolistic competition in the United States?
A. Automotive
B. Produce
C. Clothing
D. Heating fuel
14. The fixed costs of manufacturing a new tablet computer are $10,000. The sales price is $120, and variable cost per unit is $40. What's the break-even point in units?
A. 125 units
B. 20 units
C. 250 units
D. 100 units
15. Marketers of innovative products often start out with a price skimming strategy rather than a market penetration strategy because
A. price skimming lowers the value for consumers.
B. price skimming targets all product adopters equally.
C. few consumers comprehend the penetration strategy.
D. it's easier to lower prices than to raise them.
16. Manufacturers like rebates because
A. a small amount of rebates are actually redeemed.
B. rebates expire faster than coupons do.
C. there's less price discrimination.
D. they build brand recognition.
17. In _______ competition, there are many firms providing differentiated products.
A. oligopolistic
B. conventional
C. pure
D. monopolistic
18. At the break-even point, _______ are zero.
A. costs
B. contributions per unit
C. price
D. profits
19. If all three gas stations in town decide to charge the same price for a gallon of gasoline, what type of pricing tactic is being used?
A. Horizontal price fixing
B. Vertical price fixing
C. Vertical price discrimination
D. Horizontal price discrimination
20. For marketers to advertise a price as their regular price, at least ______ percent of the sales of a product must occur at that price.
A. 50
B. 40
C. 90
D. 10