Question 1

Which of the following is not an example of price?

Accepted Answer

A)   college tuition.
B)   doctor's fee.
C)   apartment rent.
D)   interest on a loan.
E)   all of the above are examples of price.F) A) and E)
G) B) and C)

Question 2

Introductory price dealing involves setting high initial prices on a product when it is introduced--to see how much consumers are willing to pay.

Accepted Answer

A) True 
 B)False

Question 3

An "all the traffic will bear" pricing objective is a ______________ objective.

Accepted Answer

A)   target return
B)   profit maximization
C)   growth in market share
D)   meeting competition
E)   nonprice competitionF) D) and E)
G) None of the above

Question 4

Producers offer trade (functional)  discounts to:

Accepted Answer

A)   encourage customers to buy out-of-season merchandise.
B)   encourage customers to pay their bills quickly.
C)   prevent retailers from becoming wholesalers.
D)   encourage quantity purchases by customers.
E)   cover the cost of work wholesalers or retailers are expected to do.F) A) and D)
G) None of the above

Question 5

Price discrimination is illegal according to the provisions of the Robinson-Patman Act.

Accepted Answer

A) True 
 B)False

Question 6

A pricing objective that seeks a specific level of profit is a:

Accepted Answer

A)   profit maximization objective.
B)   value objective.
C)   sales-oriented objective.
D)   target return objective.
E)   status-quo objective.F) A) and E)
G) A) and D)

Question 7

A manufacturer could try to defend itself against charges of price discrimination under the Robinson-Patman Act by claiming that:

Accepted Answer

A)   the products were not of "like grade and quality."
B)   any price differences were to "meet competition in good faith."
C)   the price differences did not injure competition.
D)   the price differences were justified on the basis of cost differences.
E)   All of the above are possible defenses against price discrimination charges.F) None of the above
G) A) and B)

Question 8

A marketing manager for a large company who wants to compare the financial performance of different divisions of the firm would probably pursue which of the following pricing objectives?

Accepted Answer

A)   Status quo
B)   Market share
C)   Target return
D)   Profit maximization
E)   Sales growthF) All of the above
G) C) and E)

Question 9

Which of the following is a STATUS-QUO pricing objective?

Accepted Answer

A)   Growth in sales
B)   Maximize profits
C)   Growth in market share
D)   Satisfactory profits
E)   Meeting competitionF) A) and E)
G) A) and D)

Question 10

Noncumulative quantity discounts are intended to encourage customers to make more of their on-going purchases from the same seller.

Accepted Answer

A) True 
 B)False

Question 11

Ceramics Distributing Co. wants to keep its inventory low. Which of the following would be LEAST likely to encourage customers to take over more responsibility for the storage function?

Accepted Answer

A)   offering a cumulative quantity discount
B)   offering a stocking allowance
C)   offering a noncumulative quantity discount
D)   offering a seasonal discountE) None of the above
F) C) and D)

Question 12

Antidumping laws:

Accepted Answer

A)   protect consumers from the high prices charged by monopolistic foreign producers.
B)   set the maximum price a foreign producer can charge.
C)   are used in an effort to control the minimum price of imported products.
D)   make it illegal for a foreign producer to sell a product at a price level lower than domestic producers.
E)   force foreign producers to sell below cost if they want to compete with a nation's domestic producers.F) A) and B)
G) A) and C)

Question 13

A cash discount of 3/15, net 30 means that:

Accepted Answer

A)   The buyer gets a 15 percent discount off the face value of the invoice if the invoice is paid within 3 days.
B)   The buyer gets a 3 percent discount off the face value of the invoice if the invoice is paid within 15 days.
C)   The buyer makes a 3 percent down payment on the face value of the invoice within 15 days; the remainder is due in 30 days.
D)   The buyer gets a 3/15 (20 percent)  discount if the invoice is paid within 30 days.
E)   None of the above.F) A) and B)
G) None of the above

Question 14

Penetration pricing may be wise if the firm expects strong competition very soon after introduction.

Accepted Answer

A) True 
 B)False

Question 15

A skimming pricing policy tries to sell to customers who are at the top of the demand curve first, before aiming for more price sensitive customers.

Accepted Answer

A) True 
 B)False

Question 16

A "penetration pricing policy":

Accepted Answer

A)   is the same as a "meeting competition" price-level policy.
B)   is wise when demand is fairly inelastic--offering an "elite" market.
C)   involves temporary price cuts to speed new products into market.
D)   involves a series of step-by-step price reductions along an inelastic demand curve.
E)   may be wise if a firm expects strong competition very soon after its product introduction.F) A) and E)
G) A) and C)

Question 17

Pricing objectives and policies should flow from company-level objectives.

Accepted Answer

A) True 
 B)False

Question 18

KeyLine, Inc., engages primarily in the manufacture of touch-sensitive LCD monitors. The company prices its products so that it earns a 20 percent return on investment. Which pricing objective is the company following?

Accepted Answer

A)   Meet competition
B)   Unit sales growth
C)   Non price competition
D)   Target return
E)   Share of marketF) C) and D)
G) C) and E)

Question 19

A jewelry store advertises a one-carat diamond engagement ring as being discounted 50 percent off the original price of $10,000, for a sale price of $5,000. However, the ring was never put on sale at the original price, and its actual cost to the retailer was only $1,500. This jewelry store could be accused of using:

Accepted Answer

A)   Price fixing.
B)   Phony list prices.
C)   Dumping.
D)   Price discrimination.
E)   Unfair trade practices.F) A) and B)
G) A) and C)

Question 20

If one of Bella Computers' retail customers did not pay the invoice for 30 days, the customer would - in effect - be borrowing at what annual interest rate?

Accepted Answer

A)   9 percent
B)   18 percent
C)   27 percent
D)   36 percent
E)   72 percentF) A) and C)
G) A) and E)

Exam 17: Pricing Objectives and Policies

An "all the traffic will bear" pricing objective is a ______________ objective.

Correct Answer
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Which of the following is not an example of price?

Correct Answer
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Which of the following is a STATUS-QUO pricing objective?

Correct Answer
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Ceramics Distributing Co. wants to keep its inventory low. Which of the following would be LEAST likely to encourage customers to take over more responsibility for the storage function?

Correct Answer
verified

A pricing objective that seeks a specific level of profit is a:

Correct Answer
verified

Producers offer trade (functional) discounts to:

Correct Answer
verified

A cash discount of 3/15, net 30 means that:

Correct Answer
verified

Noncumulative quantity discounts are intended to encourage customers to make more of their on-going purchases from the same seller.

Correct Answer
verified

Pricing objectives and policies should flow from company-level objectives.

Correct Answer
verified

Price discrimination is illegal according to the provisions of the Robinson-Patman Act.

Correct Answer
verified

A marketing manager for a large company who wants to compare the financial performance of different divisions of the firm would probably pursue which of the following pricing objectives?

Correct Answer
verified

Penetration pricing may be wise if the firm expects strong competition very soon after introduction.

Correct Answer
verified

Antidumping laws:

Correct Answer
verified

A skimming pricing policy tries to sell to customers who are at the top of the demand curve first, before aiming for more price sensitive customers.

Correct Answer
verified

KeyLine, Inc., engages primarily in the manufacture of touch-sensitive LCD monitors. The company prices its products so that it earns a 20 percent return on investment. Which pricing objective is the company following?

Correct Answer
verified

A "penetration pricing policy":

Correct Answer
verified

If one of Bella Computers' retail customers did not pay the invoice for 30 days, the customer would - in effect - be borrowing at what annual interest rate?

Correct Answer
verified

Introductory price dealing involves setting high initial prices on a product when it is introduced--to see how much consumers are willing to pay.

Correct Answer
verified

A manufacturer could try to defend itself against charges of price discrimination under the Robinson-Patman Act by claiming that:

Correct Answer
verified

Correct Answer
verified

Exam 17: Pricing Objectives and Policies

An "all the traffic will bear" pricing objective is a ______________ objective.

Correct AnswerverifiedShow Answer

Which of the following is not an example of price?

Correct AnswerverifiedShow Answer

Which of the following is a STATUS-QUO pricing objective?

Correct AnswerverifiedShow Answer

Ceramics Distributing Co. wants to keep its inventory low. Which of the following would be LEAST likely to encourage customers to take over more responsibility for the storage function?

Correct AnswerverifiedShow Answer

A pricing objective that seeks a specific level of profit is a:

Correct AnswerverifiedShow Answer

Producers offer trade (functional) discounts to:

Correct AnswerverifiedShow Answer

A cash discount of 3/15, net 30 means that:

Correct AnswerverifiedShow Answer

Noncumulative quantity discounts are intended to encourage customers to make more of their on-going purchases from the same seller.

Correct AnswerverifiedShow Answer

Pricing objectives and policies should flow from company-level objectives.

Correct AnswerverifiedShow Answer

Price discrimination is illegal according to the provisions of the Robinson-Patman Act.

Correct AnswerverifiedShow Answer

A marketing manager for a large company who wants to compare the financial performance of different divisions of the firm would probably pursue which of the following pricing objectives?

Correct AnswerverifiedShow Answer

Penetration pricing may be wise if the firm expects strong competition very soon after introduction.

Correct AnswerverifiedShow Answer

Antidumping laws:

Correct AnswerverifiedShow Answer

A skimming pricing policy tries to sell to customers who are at the top of the demand curve first, before aiming for more price sensitive customers.

Correct AnswerverifiedShow Answer

KeyLine, Inc., engages primarily in the manufacture of touch-sensitive LCD monitors. The company prices its products so that it earns a 20 percent return on investment. Which pricing objective is the company following?

Correct AnswerverifiedShow Answer

A "penetration pricing policy":

Correct AnswerverifiedShow Answer

If one of Bella Computers' retail customers did not pay the invoice for 30 days, the customer would - in effect - be borrowing at what annual interest rate?

Correct AnswerverifiedShow Answer

Introductory price dealing involves setting high initial prices on a product when it is introduced--to see how much consumers are willing to pay.

Correct AnswerverifiedShow Answer

A manufacturer could try to defend itself against charges of price discrimination under the Robinson-Patman Act by claiming that:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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