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| 1 | |
_________________ is the overall sacrifice a consumer is willing to make to acquire a specific product or service. |
| | A) | Financial expenditure |
| | B) | Total cost |
| | C) | Demand total |
| | D) | Marketing commitment |
| | E) | Price |
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| 2 | |
While most consumers look at price and quality, the majority of customers are looking for: |
| | A) | high value. |
| | B) | price guarantees. |
| | C) | cash, debit and credit options. |
| | D) | the best selection among competitive offerings. |
| | E) | courteous sales associates. |
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| 3 | |
Which of the following is NOT one of the Five C's of Pricing? |
| | A) | Customers |
| | B) | Channel members |
| | C) | Cost |
| | D) | Continuity |
| | E) | Company objectives |
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| 4 | |
If a firm is taking an aggressive pricing approach by setting prices very low to generate new sales, the firm would be taking a ______________________ pricing objective. |
| | A) | competitor-oriented |
| | B) | sales-oriented |
| | C) | customer-oriented |
| | D) | profit-oriented |
| | E) | opportunity-oriented |
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| 5 | |
The _______________ shows the relationship between price and quantity demanded in a period of time. |
| | A) | break-even curve |
| | B) | product life cycle curve |
| | C) | diffusion of innovation curve |
| | D) | supply coefficient |
| | E) | demand curve |
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| 6 | |
Price elasticity of demand measures consumers': |
| | A) | willingness to engage in comparison shopping. |
| | B) | sensitivity to price changes. |
| | C) | responses to a change in disposable or household income. |
| | D) | competitive parity. |
| | E) | industry cost structure. |
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| 7 | |
The fewer substitutes that exist in a market: |
| | A) | the lower the price elasticity for each product. |
| | B) | the higher the price elasticity for each product. |
| | C) | the more intense will be the competition. |
| | D) | the more sensitive consumers will be to entry of new competitors. |
| | E) | the more likely the market will be characterized as price wars. |
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| 8 | |
Fixed costs are costs that: |
| | A) | remain constant as the volume of production increases or decreases. |
| | B) | remain constant until economics of scale are reached. |
| | C) | remain constant for a fiscal or calendar reporting period then decrease over time, period by period. |
| | D) | are also known as gross margin. |
| | E) | cannot be affected by marketing efforts. |
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| 9 | |
____________________ enables managers to examine the relationship among cost, price, revenue and profit over different levels of production and sales. |
| | A) | Life cycle costing |
| | B) | Econometric modeling |
| | C) | Break-even analysis |
| | D) | Pricing objective comparisons |
| | E) | The operations to sales ratio |
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| 10 | |
If the fixed costs of opening an Internet-based, artisan soap business are $2,000, the price is $6 per unit and the variable costs are $2, the break-even point in units is: |
| | A) | 500 |
| | B) | 4000 |
| | C) | 20 |
| | D) | 1000 |
| | E) | 250 |
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| 11 | |
If a new entrant to a market wanted to gain market share or if established competitors might want to avoid seeming insensitive to competitors' moves, they might engage in a normally destructive tactic known as a ___________________. |
| | A) | nose-dive pricing situation |
| | B) | extreme market penetration option |
| | C) | price war |
| | D) | pure competition freefall |
| | E) | race to the bottom |
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| 12 | |
When companies sell commodity products that consumers perceive as substitutable, the market will be characterized as: |
| | A) | oligopolistic competition |
| | B) | freely substitutable competition |
| | C) | monopolistic competition |
| | D) | pure competition |
| | E) | controlled market competition |
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| 13 | |
A(n) _____________ is not illegal, but it circumvents authorized channels of distribution to sell goods at prices lower than those intended by the manufacturer. |
| | A) | auction market |
| | B) | gray market |
| | C) | black market |
| | D) | off-price market |
| | E) | hostage market |
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| 14 | |
The Internet allows consumers access to more products, services and information, which has made them ___________________. |
| | A) | less price sensitive |
| | B) | less willing to go beyond their pricing comfort zone. |
| | C) | less willing to take risks |
| | D) | more price sensitive. |
| | E) | more willing to keep a good deal to themselves once they've discovered it. |
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