Question 1For 2006, the price of a single ticket in the infield box at an Atlanta Braves baseball game was $35. The effective value of a season pass for the same seat was $2,735, but the buyer was only charged $2,241. Season ticket buyers were rewarded with:promotional allowancesnoncumulative quantity discountsfrequent buyer discountsfunctional discountscumulative quantity discounts4 points Question 2Shipping fresh-cut flowers to international buyers can be risky because of price changes during the time required for shipment, expense incurred over long distances, and quality of product delivered. To minimize risks and costs, a seller would likely employ:freight absorption pricinguniform delivered pricingzone pricingbasing-point pricingFOB origin pricing4 points Question 3American Girl CatalogThe American Girl catalog began as a concept to introduce girls who lived in the past to today’s girls. Each historically accurate doll is carefully crafted and dressed and has books to describe her life. For example, Kristen is an 1854 pioneer girl who is growing up in Minnesota. Her story begins with her long sea voyage from Sweden. The basic doll dressed in a calico dress and striped apron and the hardcover story of how she got to Minnesota cost $90. Six more hardback books of Kristen’s life are available for $80. Kristen’s nightgown costs $20, and a matching one for the doll owner is an additional $40. Buy both together and the price is only $50. A hand-painted wooden bed and trunk for Kristen are available for $220. Shipping costs vary with the price of the merchandise ordered and are not connected to weight or distance.Refer to American Girl Catalog. When a customer buys the matching nightgown set for the doll and her owner, American Girl priced the items using:price bundlingmarkdown pricingpsychological pricingpenetration pricingstatus quo pricing4 points Question 4The DCS Stainless Steel Gas Grill for outside cooking costs $3,995. The market for a grill that could easily replace a kitchen range is limited even though a lot of people have seen articles about this grill in cooking magazines and in the cooking section of newspapers. There is no potential competitor for this grill. The _____ strategy is probably best.price-skimmingpenetration pricingstatus quocost bundlingprice-lining4 points Question 5When Microsoft introduced its Windows NT network operating system, it gave buyers free Web-server software. At the same time, Netscape was trying to sell similar Web-server software for $4,999. Once Microsoft got a lion’s share of the market, and Netscape’s market share declined substantially, Microsoft began charging an above-market price for its Web-server software. Many people thought Microsoft was guilty of:predatory pricingunfair trade practiceschannel manipulation pricingprice fixingprice discrimination4 points Question 6For which of the following situations would a price-skimming strategy be most appropriate?the addition of a new comic book series with an obviously gay herothe introduction of a new brand of bottled waterthe elimination of demand for low wattage light bulbsthe introduction of a unique, roomy automobile model that has extremely low energy and fuel coststhe introduction of a Barbie Olympic champion doll by Mattel and the International Olympic Committee4 points Question 7The Grand Slam Ticket Pack of Major League Baseball’s Atlanta Braves provides four game tickets, four hotdogs, four Coca-Colas, four Braves bucket caps, one game program, and parking at prices as low as $59. This price is significantly lower than the items could be purchased individually and means the Braves are using:price liningtwo-part pricingprice maintenanceprice bundlingprice bracketing4 points Question 8Green Earth Marketing sells containers for temporary storage of recyclables nationally through its catalog. The company wants to simplify pricing and reduce its risk. Green Earth also desires some type of difference in price due to distance. As a result, the company should use _____ pricing.two-partuniform deliveredfreight absorptionflexiblezone4 points Question 9Alissa Dunn is the owner and operator of Dunn’s Best Jams, which she sells at craft festivals. She only makes and sells three types of jams–pecan pie jam, chocolate pie jam, and lemon tart jam. The costs of leasing her professional kitchen for manufacturing, travel to craft shows, insurance, and so on are allocated on an equal basis to the three types of jam sold. In other words these costs are:derived costselastic costsjoint costsrevenue impedimentssynergistic costs4 points Question 10For centuries, businesses used negotiations and bartering as a matter of routine. The Industrial Age saw the emergence of mass production and extended distribution chains, which made face-to-face negotiations with each customer impractical. Fixed prices became necessary to manage the enormous growth in both the volume and the variety of products, distributed over larger geographic regions. The advent of the Internet and electronic commerce has greatly affected the way businesses price their goods and services and has allowed for the use of more _____, a form of customized pricing.zoning (or basing) pricingillegal price fixingprice maintenancepsychological (or odd-even) pricingflexible (or variable) pricing4 points Question 11K&G Restaurant Supplies sells paper products and commodity items like flour to for-profit businesses. It charges a substantially lower price to companies that operate multiple locations such as a restaurant chain. It charges a higher price to small or independent operations because they are less profitable customers. K&G Restaurant Supplies is engaging in:unfair trade practicesprice fixingprice discriminationpredatory pricingbait pricing4 points Question 12Jones Soda Company and Big Sky Brands have introduced Jones Soda Carbonated Candy, a candy that delivers a blast of the most popular Jones Soda flavors along with an oddly enjoyable tongue-tingling sensation. A _____ strategy would most likely be used with this product to convince consumers to try it and not buy some other brand.price-liningprice-fixingstatus quo pricingpenetration pricingprice-skimming4 points Question 13Which of the following statements about price is true?Price and revenue are synonyms.Price always equals some monetary figure.Price is not necessarily based on the satisfaction consumers receive from a product.High prices result in high profits.All of these statements about price are true.4 points Question 14Under which of the following conditions will companies with low market share be most likely to fail?competing in a slow-growth industrycompeting in an industry that makes frequently purchased itemscompeting in an industry with few product changescompeting in an industry requiring market power and economies of scalecompeting in none of these industries4 points Question 15The point at which marginal cost and marginal revenue are equal always results in:maximization of elasticitymaximization of revenuemaximization of costsmaximization of profitsbreak-even equilibrium4 points Question 16Why are marketing managers finding it more difficult to set prices in today’s environment?Inflationary and recessionary periods have made customers less price-sensitive.Fewer dealer and generic brands are available because the competition has been eliminated.The high rate of new-product introductions has led to careful reevaluation by consumers.Marketing managers are finding it difficult to compare prices between suppliers.Buyers are less informed and are less price-sensitive.4 points Question 17_____ pay for every activity of the company.RevenuesInvestmentsRetained earningsProfitsPrices4 points Question 18Queeg Industries sells all types of artists’ paintbrushes. When the owner of Queeg learned that Patterson Art, one of its biggest competitors in the Northeast region, had lowered its prices on all synthetic brushes by 5 percent, he did the same. This is an example of _____ pricing.status quotarget returnmarket sharepredatorycost-plus4 points Question 19Which of the following is most likely to be a variable
cost for an Internet retailer that sells spices, herbs, and seasonings to consumers?annual lease on mixer used to blend seasoningsexecutive salariesrent for building where spices and herbs are repackaged for consumersworkers’ insurancepostage for shipping spices and herbs4 points Question 20An independent retailer of specialty kitchen items wants to determine what price she should put on a set of plastic wine glasses. They cost her $7. She desires a markup of 30 percent based on selling price. Which of the following is closest to the price she should charge her customers?$19$12$15$10$184 points Question 21Which of the following describes a disadvantage associated with markup pricing?how difficult it is to implementits failure to explicitly consider product demandits dependence on marginal coststoo many factors influence itnone of these4 points Question 22Continental LiteIn the mid-1990s, Continental Airlines chose to compete head-on with Southwest Airlines by launching Continental Lite, an alternative low-fare commercial airline passenger operation. Top executives at Continental had expected its no-frills operation to break even within a year of its inception, but the airline fell short of the goal. A source close to the company explained it by saying, “Its costs were too high, and its revenues were too low.” Some observers criticized Continental’s marketing efforts. When the no-frills service was first launched, it lacked a distinct name or identity, missing its chance to make a splash. Then Continental tried to sell three “brands” at once–Lite, a new premium service, and its more traditional long-haul domestic flights. As one rival expressed it, “You cannot be all things to all people.”Refer to Continental Lite. The statement that Continental Lite had problems because “Its costs were too high, and its revenues were too low,” suggests that the airline had no _____ left over after paying for airline activities.ROIrevenueprofitreturnsCOGS4 points Question 23Specialty CakesImagine you’re planning an after-symphony fund-raising party, and you need a life-size grand piano cake. Or, you are a developer proposing a new shopping center to a group of investors, and you want to serve a cake shaped like an architectural rendition of the center. Is this impossible? No, you just need to contact Cecilia Villaveces Cakes. She actually built a life-size grand piano for a gala in Macon, Georgia. You can expect to pay anywhere from $75 to $10,000 for one of Cecilia’s artistic creations, depending on complexity of design and size. She uses only the best ingredients, and no two cakes are ever quite alike.Refer to Specialty Cakes. Many party planners in the Southeast will only use Cecilia Villaveces Cakes at their parties–no matter what the price is. They know that Cecilia’s cakes can make a party a success. Moreover, the cakes are what people remember most about the parties. From this description, you should assume Cecilia Villaveces Cakes have a(n):elastic demandunitary elasticityinelastic supplyinelastic demandelastic supply4 points Question 24Which of the following factors does NOT directly affect the elasticity of demand?the other uses of a productthe inputs needed to manufacture the productthe availability of substitute goodsthe price relative to a consumer’s purchasing powera product’s durability4 points Question 25Kenady Appliances pays a manufacturer $800 for a convection oven, and it sells the convection oven to a customer for $1,600. The markup on the screen is:$240$160$800variablecannot be determined