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Exam 12: Pricing Concepts and Management

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Question 151

Multiple Choice

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If the terms of a business exchange are 2/10 net 30, this means that the transaction

A) involves a cumulative discount if paid in 30 days.
B) involves a noncumulative discount.
C) offers a discount if the buyer lives within a ten-mile radius.
D) price does not include the cost of freight.
E) involves a cash discount if paid within ten days.

F) A) and B)
G) A) and C)

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Question 152

Multiple Choice

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The Highland Racquet Club found that with annual fixed costs of $60,000, its breakeven point is 2,000 members when the membership charge is $60 per person per year. What is the variable cost per person for Highland?

A) $45
B) $50
C) $30
D) $25
E) $40

F) A) and B)
G) A) and D)

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Question 153

Multiple Choice

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All of the following are psychological techniques except

Some stores employ comparison shoppers to learn what prices their competitors are charging.

The firm should produce the quantity at which marginal revenue and marginal cost are equal.

Which of the following products is most likely to involve personal selling?

Knowing the target market's evaluation of price allows the marketer to know how much emphasis to place on price and how to price a product relative to competition.

The six stages of setting prices should always be followed if prices are to be set correctly.

Knowing the target market's evaluation of price allows the marketer to know how much emphasis to place on price and how to price a product relative to competition.

The way that pricing is used in the marketing mix will influence the determination of the final price.

Compare and contrast price skimming and penetration pricing.

Pricing whereby the buyer absorbs all or part of the freight costs is freight absorption pricing.

Explain the difference between cost-plus and markup pricing.

ACE Electronics introduces a new voice-activated personal computer that no longer requires a keyboard. ACE charges the high price of $11,000 per unit, thus generating large profits because it has a 20 percent market share. ACE's major problem in the future will most likely be

Identify and describe six types of psychological pricing.

Which of the following prohibits price discrimination that lessens competition among wholesalers and retailers?

Competition-based pricing is

You are the head of pricing strategy for your firm and you are very excited about a new point-of-sale system that has just been installed in all your firm's retail outlets. The system is a state-of-the-art, real-time information system that captures the details of every sale made in your retail outlets. Now, you will have up-to-the-minute data on sales volume trends and performances for your entire product line. You plan to use this data to set prices based on these volume trends. Which of the following basis for pricing are you intending to use?

Which of the following is a requirement for setting pricing objectives?

The effectiveness of demand-based pricing often depends on a marketer's ability to determine all the costs associated with the product.