Question 1

Vertical price fixing involves controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price. This practice is also called

Accepted Answer

A)   price discrimination.
B)   predatory pricing.
C)   a tying arrangement.
D)   resale price maintenance.
E)   exclusive dealing.F) C) and E)
G) A) and D)

Question 2

The practice of replacing promotional allowances with lower manufacturer list prices is referred to as

Accepted Answer

A)   everyday low pricing.
B)   everyday fair pricing.
C)   trade-in allowances.
D)   markdown pricing.
E)   everyday value pricing.F) B) and C)
G) B) and E)

Question 3

If the terms of the trade discount are listed 20/10/5, the number "5" represents

Accepted Answer

A)   5 percent of the suggested retail price that is available to the retailer to cover costs and provide a profit.
B)   5 percent of the suggested retail price that is available to the consumer as a rebate after purchase.
C)   5 percent of the suggested retail price that is available to the wholesaler or jobber to cover costs and provide a profit.
D)   5 percent of the suggested retail price that is available to the ultimate consumer if purchasing restrictions are met.
E)   5 percent of the suggested retail price that is the profit margin to the manufacturer.F) A) and E)
G) B) and C)

Question 4

Geographic adjustments are made by manufacturers or wholesalers to cover

Accepted Answer

A)   production costs.
B)   administrative costs.
C)   selling costs.
D)   promotional costs.
E)   transportation costs.F) B) and E)
G) B) and C)

Question 5

With uniform delivered pricing, the price the seller quotes

Accepted Answer

A)   includes all transportation costs.
B)   excludes all transportation costs.
C)   includes a fixed allowance whereby the buyer pays any costs above that allowance.
D)   includes a fixed percentage of transportation costs for which the seller will be responsible.
E)   will guarantee that a retailer will be charged the same transportation fee for all its outlets regardless of where they are located.F) A) and B)
G) D) and E)

Question 6

When you buy a used car from a CarMax dealership, you are offered the car at a "no haggle" price. You can buy it or not, but there is no negotiating the published price because of the seller's

Accepted Answer

A)   customary pricing strategy.
B)   fixed-price policy.
C)   uniform pricing policy.
D)   dynamic pricing policy.
E)   dynamic pricing strategy.F) All of the above
G) D) and E)

Question 7

If the cash discount terms for a $500 purchase are 4/10 net 30, the number 10 refers to

Accepted Answer

A)   the percentage discounted if the bill is paid within 30 days.
B)   the percentage increase in price if the bill is not paid within 10 days.
C)   the number of days for which the discount is valid.
D)   the discount in dollars per unit if the order is paid on time within 30 days.
E)   the penalty in dollars if the bill is not paid within 10 days.F) A) and E)
G) A) and D)

Question 8

Setting the price of a product or service by adding a fixed percentage to the total unit cost is referred to as

Accepted Answer

A)   cost-plus-fixed-percentage fee pricing.
B)   target pricing.
C)   cost-plus-percentage-of-cost pricing.
D)   experience-curve percentage pricing.
E)   target return on investment pricing.F) A) and E)
G) None of the above

Question 9

Define the four kinds of uniform delivered pricing methods and give an example of the use of each.

Accepted Answer

The four kinds of delivered pricing meth...

Question 10

When establishing product-line pricing, the highest-priced item is typically positioned as

Accepted Answer

A)   the oldest product item in the line.
B)   the premium item in the line in terms of quality and features.
C)   the largest selling product item in the line.
D)   the loss-leader item for the rest of the product line.
E)   the most price-insensitive product item in the line.F) B) and C)
G) A) and E)

Question 11

Which of the following statements regarding quantity discounts is most accurate?

Accepted Answer

A)   Noncumulative quantity discounts encourage large individual purchase orders, not a series of orders.
B)   Noncumulative quantity discounts encourage repeat buying by a single customer to a far greater degree than do cumulative quantity discounts.
C)   Quantity discounts are primarily used to undercut competitors' prices.
D)   Noncumulative quantity discounts encourage smaller long-term repeat purchases rather than less frequent larger short-term purchases.
E)   Quantity discounts can basically be used only once with each reseller or the price will increase.F) A) and B)
G) A) and D)

Question 12

A price war refers to

Accepted Answer

A)   competition between sellers and resellers to maintain or attain the largest market share of potential customers.
B)   conflicts between manufacturers and distributors regarding acceptable percentages they each charge relative to one another.
C)   when one channel member believes another channel member is engaged in pricing behavior that prevents it from achieving its profitability goals.
D)   the successive price cutting by competitors to increase or maintain their unit sales or market share.
E)   the practice of replacing promotional allowances with lower manufacturer list prices.F) A) and E)
G) B) and D)

Question 13

Consumers buy water and soda from vending machines. Usually the price of each of these products is about $1.50. If a marketer charges a significantly higher price for such products dispensed by vending machines, such as $2.50 per item, sales are likely to decline. Thus, marketers tend to be very consistent in the prices they charge for vending machine products. This is an example of marketers employing a ________ strategy.

Accepted Answer

A)   below-market pricing
B)   skimming pricing
C)   penetration pricing
D)   loss-leader pricing
E)   customary pricingF) A) and B)
G) C) and D)

Question 14

You can buy a General Electric dishwasher for $399 or you can buy a similar Bosch brand dishwasher for $989. Since Bosch uses its pricing strategy to project a high-quality product image, it is most likely using ________ pricing.

Accepted Answer

A)   bundle
B)   standard markup
C)   prestige
D)   penetration
E)   cost plus fixed-feeF) A) and D)
G) C) and D)

Question 15

Which of the four approaches does Carmex use to set prices for its products?

Accepted Answer

Carmex uses each of the four perspective...

Question 16

Manufacturers of private brands use which method of competition-oriented pricing?

Accepted Answer

A)   penetration pricing
B)   below-market pricing
C)   loss-leader pricing
D)   prestige pricing
E)   skimming pricingF) B) and D)
G) B) and C)

Question 17

A single jar of original formula Carmex has different prices for the product depending upon where it is sold, but each price will end in a nine ($0.99 at mass merchandisers like Walmart or Target, and between $1.59 and $1.79 in drug and food retailers such as Walgreens and Kroger) . This pricing strategy is called

Accepted Answer

A)   standard pricing.
B)   odd-even pricing.
C)   customary pricing.
D)   everyday lower pricing.
E)   at-market pricing.F) D) and E)
G) B) and C)

Question 18

Target return-on-sales pricing refers to

Accepted Answer

A)   adjusting the price of a product so it is "in line" with that of its largest competitor.
B)   setting the price of a line of products at a number of different price points.
C)   adding a fixed percentage to the cost of all items in a specific product class.
D)   setting prices to achieve a profit that is a specified percentage of the sales volume.
E)   setting a price based on a specific annual dollar target profit volume.F) A) and D)
G) None of the above

Question 19

Price discrimination is illegal under the

Accepted Answer

A)   Sherman Act.
B)   Consumer Goods Pricing Act.
C)   Robinson-Patman Act.
D)   Federal Trade Commission Act.
E)   Anti-Competitive Act.F) None of the above
G) A) and E)

Question 20

The practice of charging different prices to different buyers for goods of like grade and quality is referred to as

Accepted Answer

A)   horizontal price fixing.
B)   resale price maintenance.
C)   price discrimination.
D)   predatory pricing.
E)   bait and switch pricing.F) A) and D)
G) B) and D)

Exam 14: Arriving at the Final Price

When you buy a used car from a CarMax dealership, you are offered the car at a "no haggle" price. You can buy it or not, but there is no negotiating the published price because of the seller's

Correct Answer
verified

When establishing product-line pricing, the highest-priced item is typically positioned as

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

With uniform delivered pricing, the price the seller quotes

Correct Answer
verified

If the terms of the trade discount are listed 20/10/5, the number "5" represents

Correct Answer
verified

Setting the price of a product or service by adding a fixed percentage to the total unit cost is referred to as

Correct Answer
verified

You can buy a General Electric dishwasher for $399 or you can buy a similar Bosch brand dishwasher for $989. Since Bosch uses its pricing strategy to project a high-quality product image, it is most likely using ________ pricing.

Correct Answer
verified

If the cash discount terms for a $500 purchase are 4/10 net 30, the number 10 refers to

Correct Answer
verified

Price discrimination is illegal under the

Correct Answer
verified

Vertical price fixing involves controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price. This practice is also called

Correct Answer
verified

Which of the following statements regarding quantity discounts is most accurate?

Correct Answer
verified

Define the four kinds of uniform delivered pricing methods and give an example of the use of each.

Correct Answer
verified
The four kinds of delivered pricing meth...
View Answer

Manufacturers of private brands use which method of competition-oriented pricing?

Correct Answer
verified

The practice of charging different prices to different buyers for goods of like grade and quality is referred to as

Correct Answer
verified

A price war refers to

Correct Answer
verified

The practice of replacing promotional allowances with lower manufacturer list prices is referred to as

Correct Answer
verified

Target return-on-sales pricing refers to

Correct Answer
verified

Geographic adjustments are made by manufacturers or wholesalers to cover

Correct Answer
verified

Which of the four approaches does Carmex use to set prices for its products?

Correct Answer
verified
Carmex uses each of the four perspective...
View Answer

Exam 14: Arriving at the Final Price

When you buy a used car from a CarMax dealership, you are offered the car at a "no haggle" price. You can buy it or not, but there is no negotiating the published price because of the seller's

Correct AnswerverifiedShow Answer

When establishing product-line pricing, the highest-priced item is typically positioned as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

With uniform delivered pricing, the price the seller quotes

Correct AnswerverifiedShow Answer

If the terms of the trade discount are listed 20/10/5, the number "5" represents

Correct AnswerverifiedShow Answer

Setting the price of a product or service by adding a fixed percentage to the total unit cost is referred to as

Correct AnswerverifiedShow Answer

You can buy a General Electric dishwasher for $399 or you can buy a similar Bosch brand dishwasher for $989. Since Bosch uses its pricing strategy to project a high-quality product image, it is most likely using ________ pricing.

Correct AnswerverifiedShow Answer

If the cash discount terms for a $500 purchase are 4/10 net 30, the number 10 refers to

Correct AnswerverifiedShow Answer

Price discrimination is illegal under the

Correct AnswerverifiedShow Answer

Vertical price fixing involves controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price. This practice is also called

Correct AnswerverifiedShow Answer

Which of the following statements regarding quantity discounts is most accurate?

Correct AnswerverifiedShow Answer

Define the four kinds of uniform delivered pricing methods and give an example of the use of each.

Correct AnswerverifiedThe four kinds of delivered pricing meth...View AnswerShow Answer

Manufacturers of private brands use which method of competition-oriented pricing?

Correct AnswerverifiedShow Answer

The practice of charging different prices to different buyers for goods of like grade and quality is referred to as

Correct AnswerverifiedShow Answer

A price war refers to

Correct AnswerverifiedShow Answer

The practice of replacing promotional allowances with lower manufacturer list prices is referred to as

Correct AnswerverifiedShow Answer

Target return-on-sales pricing refers to

Correct AnswerverifiedShow Answer

Geographic adjustments are made by manufacturers or wholesalers to cover

Correct AnswerverifiedShow Answer

Which of the four approaches does Carmex use to set prices for its products?

Correct AnswerverifiedCarmex uses each of the four perspective...View AnswerShow Answer

Correct Answer
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The four kinds of delivered pricing meth...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Carmex uses each of the four perspective...
View Answer