14 Aug 1) ________ is the amount of money charged for a product or service. A) Experien

1)
________ is the amount of money charged for a product or service.
A)
Experience curve
B)
Demand curve
C)
Price
D)
Wage
E)
Salary

2)
Price is the only element in the marketing mix that produces ________.
A)
revenue
B)
variable costs
C)
expenses
D)
outfixed costs
E)
stability
3)
If a seller charges ________ than the buyer’s perceived value, the company’s
sales will ________.
A)
more; benefit
B)
more; suffer
C)
less; increase
D)
less; suffer
E)
none of the above

4)
Some companies have adopted a ________ strategy, offering just the right
combination of quality and good service at a fair price.
A)
value-based pricing
B)
good-value pricing
C)
cost-plus pricing
D)
low-price image
E)
none of the above

5)
Wal-Mart is famous for using what important type of value pricing?
A)
competition-based pricing
B)
everyday low pricing
C)
cost-plus pricing
D)
break-even pricing
E)
penetration pricing

6)
________ involves charging a constant, everyday low price with few or no
temporary price discounts.
A)
High-low pricing
B)
Target pricing
C)
Cost-plus pricing
D)
EDLP
E)
Penetration pricing
7)
________ are the sum of the ________ and ________ for any given level of
production.
A)
Fixed costs; variable; total costs
B)
Fixed costs; total; variable costs
C)
Variable costs; fixed; total costs
D)
Total costs; fixed; variable costs
E)
Break-even costs; fixed; total costs
8)
SRAC is the acronym for which concept related to costs at different levels of
production?
A)
strategic reasoning and costs
B)
short-run accounting costs
C)
short-run average cost
D)
strategic rights and company
E)
strategic revenues and costs
9)
As production workers become better organized and more familiar with equipment,
the average cost per unit decreases. This is called the ________.
A)
demand curve
B)
experience curve
C)
short-run average cost curve
D)
long-run average cost curve
E)
marginal utility

10) With a higher volume of product, most
companies can expect to ________.
A)
gain economies of scale
B)
become less efficient
C)
see average costs increase
D)
have a straight, horizontal learning curve
E)
find competitors using the experience curve strategically
11) The break-even volume is the point at
which ________.
A)
the total revenue and total costs lines intersect
B)
demand equals supply
C)
the production of one more unit will not increase profit
D)
the company can pay all of its long-term debt
E)
a firm’s profit goal is reached

12) ________ pricing works only if that
price actually brings in the expected level of sales.
A)
Elasticity
B)
Markup
C)
Variable
D)
Inelasticity
E)
Target profit
13) Which of the following statements
about break-even analysis is true?
A)
It is used to determine how much production experience a company must have to
achieve desired efficiencies.
B)
It is a technique used to calculate fixed costs.
C)
It determines the amount of retained earnings a company will have during an
accounting period.
D)
It is a technique marketers use to examine the relationship between supply and
demand.
E)
It is calculated using variable costs, the unit price, and fixed costs.

14) As a manufacturer increases price, the
________ drops.
A)
target
B)
break-even volume
C)
cost-plus pricing
D)
total cost
E)
sales
15) Which of the following is an external
factor that affects pricing decisions?
A)
the salaries of production management
B)
competition
C)
the salaries of finance management
D)
funds expensed to clean production equipment
E)
A, B, and C

16) ________ that influence pricing
decisions include the nature of the market and demand and competitors’ prices.
A)
Internal factors
B)
Elasticity factors
C)
External factors
D)
Target factors
E)
Domestic factors

17) Companies may set prices low for which
of the following reasons EXCEPT ________.
A)
to prevent competition from entering the market
B)
to stabilize the market
C)
to create excitement for a product
D)
to prepare for an easy exit from a market
E)
to match a competitor
18) In order to form a consistent and
effective integrated marketing program, price decisions should be coordinated
with each of the following EXCEPT ________.
A)
product design
B)
distribution
C)
competitors’ prices
D)
promotion decisions
E)
marketing objectives
19) With target costing, marketers will
first ________ and then ________.
A)
build the marketing mix; identify the target market
B)
identify the target market; build the marketing mix
C)
design the product; determine its cost
D)
use skimming pricing; penetrating pricing
E)
determine a selling price; target costs to ensure that the price is met

20) Price setting is usually determined by
________ in small companies.
A)
top management
B)
marketing departments
C)
sales departments
D)
divisional managers
E)
cross-functional teams

21) Price setting is usually determined by
________ in large companies.
A)
top management
B)
divisional managers
C)
product line managers
D)
pricing departments
E)
both B and C
22) EDLP is very similar to high-low
pricing.

23) Overhead cost is another term for
fixed cost.

24) Cost-based pricing relies on consumer
perception of value to drive pricing.

25) Average unit cost increases with
accumulated production experience.

26) An upward-sloping experience curve is
beneficial for a company.

27) The simplest pricing method is
cost-plus pricing, which involves adding a standard markup to the cost of the
product.
28) Markup pricing is popular because
prices tend to be similar and price competition is thus minimized.

29) Target profit pricing is used when a
firm tries to determine the price at which it will break even or make the
profit it is seeking.

30) A break-even chart
shows the total cost and total revenue expected at various sales volume levels1)
________ is the amount of money charged for a product or service.A)
Experience curveB)
Demand curveC)
PriceD)
WageE)
Salary2)
Price is the only element in the marketing mix that produces ________.A)
revenueB)
variable costsC)
expensesD)
outfixed costsE)
stability3)
If a seller charges ________ than the buyer’s perceived value, the company’s
sales will ________.A)
more; benefitB)
more; sufferC)
less; increaseD)
less; sufferE)
none of the above4)
Some companies have adopted a ________ strategy, offering just the right
combination of quality and good service at a fair price.A)
value-based pricingB)
good-value pricingC)
cost-plus pricingD)
low-price imageE)
none of the above5)
Wal-Mart is famous for using what important type of value pricing?A)
competition-based pricingB)
everyday low pricingC)
cost-plus pricingD)
break-even pricingE)
penetration pricing6)
________ involves charging a constant, everyday low price with few or no
temporary price discounts.A)
High-low pricingB)
Target pricingC)
Cost-plus pricingD)
EDLPE)
Penetration pricing7)
________ are the sum of the ________ and ________ for any given level of
production.A)
Fixed costs; variable; total costsB)
Fixed costs; total; variable costsC)
Variable costs; fixed; total costsD)
Total costs; fixed; variable costsE)
Break-even costs; fixed; total costs8)
SRAC is the acronym for which concept related to costs at different levels of
production?A)
strategic reasoning and costsB)
short-run accounting costsC)
short-run average cost D)
strategic rights and companyE)
strategic revenues and costs9)
As production workers become better organized and more familiar with equipment,
the average cost per unit decreases. This is called the ________.A)
demand curveB)
experience curveC)
short-run average cost curveD)
long-run average cost curveE)
marginal utility10) With a higher volume of product, most
companies can expect to ________.A)
gain economies of scaleB)
become less efficientC)
see average costs increaseD)
have a straight, horizontal learning curveE)
find competitors using the experience curve strategically11) The break-even volume is the point at
which ________.A)
the total revenue and total costs lines intersectB)
demand equals supplyC)
the production of one more unit will not increase profitD)
the company can pay all of its long-term debtE)
a firm’s profit goal is reached12) ________ pricing works only if that
price actually brings in the expected level of sales.A)
ElasticityB)
MarkupC)
VariableD)
InelasticityE)
Target profit13) Which of the following statements
about break-even analysis is true?A)
It is used to determine how much production experience a company must have to
achieve desired efficiencies.B)
It is a technique used to calculate fixed costs.C)
It determines the amount of retained earnings a company will have during an
accounting period.D)
It is a technique marketers use to examine the relationship between supply and
demand.E)
It is calculated using variable costs, the unit price, and fixed costs.14) As a manufacturer increases price, the
________ drops. A)
targetB)
break-even volumeC)
cost-plus pricingD)
total costE)
sales15) Which of the following is an external
factor that affects pricing decisions?A)
the salaries of production managementB)
competitionC)
the salaries of finance managementD)
funds expensed to clean production equipmentE)
A, B, and C16) ________ that influence pricing
decisions include the nature of the market and demand and competitors’ prices. A)
Internal factorsB)
Elasticity factorsC)
External factorsD)
Target factorsE)
Domestic factors17) Companies may set prices low for which
of the following reasons EXCEPT ________.A)
to prevent competition from entering the marketB)
to stabilize the marketC)
to create excitement for a productD)
to prepare for an easy exit from a marketE)
to match a competitor18) In order to form a consistent and
effective integrated marketing program, price decisions should be coordinated
with each of the following EXCEPT ________.A)
product designB)
distributionC)
competitors’ pricesD)
promotion decisionsE)
marketing objectives19) With target costing, marketers will
first ________ and then ________.A)
build the marketing mix; identify the target marketB)
identify the target market; build the marketing mixC)
design the product; determine its costD)
use skimming pricing; penetrating pricingE)
determine a selling price; target costs to ensure that the price is met20) Price setting is usually determined by
________ in small companies.A)
top managementB)
marketing departmentsC)
sales departmentsD)
divisional managersE)
cross-functional teams21) Price setting is usually determined by
________ in large companies.A)
top managementB)
divisional managersC)
product line managersD)
pricing departmentsE)
both B and C22) EDLP is very similar to high-low
pricing.23) Overhead cost is another term for
fixed cost.24) Cost-based pricing relies on consumer
perception of value to drive pricing.25) Average unit cost increases with
accumulated production experience.26) An upward-sloping experience curve is
beneficial for a company.27) The simplest pricing method is
cost-plus pricing, which involves adding a standard markup to the cost of the
product.28) Markup pricing is popular because
prices tend to be similar and price competition is thus minimized.29) Target profit pricing is used when a
firm tries to determine the price at which it will break even or make the
profit it is seeking.

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