120) Pure monopoly is the competitive market situation where
A) many sellers follow market price for identical, commodity products.
B) one seller sets the price for a unique product.
C) few sellers compete, and are sensitive to one another’s prices.
D) many sellers compete on nonprice factors.
E) one or a few sellers compete solely on nonprice factors.
121) If competitive market circumstances are such that there is no price competition, no product
differentiation, and the purpose of advertising is to increase demand for the product class, then
________ must exist in the industry.
A) an oligopoly
B) monopolistic competition
C) a pure monopoly
D) pure competition
E) oligopolistic competition
122) Florida Power & Light, an electric power company, is the only source of electricity for
consumers in most parts of the Florida panhandle. The company is a(n) ________, despite the
fact that it must seek approval from the state utility commission for the rates it can charge.
A) free enterprise firm
B) oligopoly
C) monopolistic competitor
D) competitor in a pure competition
E) pure monopoly
123) In Figure 13-3 above, column A represents which type of competitive market?
A) an oligopoly
B) monopolistic competition
C) a pure monopoly
D) pure competition
E) oligopolistic competition
124) In Figure 13-3 above, column B represents which type of competitive market?
A) an oligopoly
B) monopolistic competition
C) a pure monopoly
D) pure competition
E) oligopolistic competition
125) In Figure 13-3 above, column C represents which type of competitive market?
A) an oligopoly
B) monopolistic competition
C) a pure monopoly
D) pure competition
E) oligopolistic competition
126) In Figure 13-3 above, column D represents which type of competitive market?
A) an oligopoly
B) monopolistic competition
C) a pure monopoly
D) pure competition
E) oligopolistic competition
127) Companies must know or anticipate what specific prices its present and potential
competitors currently charge
A) or may charge in the near future.
B) only when these are considered permanent prices.
C) primarily if they intend to compete on price rather than a form of differentiation like customer
service.
D) primarily if they intend to target price sensitive target markets.
E) if there are legal requirements for pricing in their industry.
128) Competitors’ prices are important only if a prospective buyer knows about those prices and
A) can act to purchase them easily.
B) there is an oligopoly in the industry.
C) is part of a price-sensitive market segment.
D) the product is at the maturity stage of the product life cycle.
E) is likely to spread information via word of mouth.
129) All of the following are legal or ethical considerations when setting a final price
except which?
A) geographical pricing
B) predatory pricing
C) price matching
D) price fixing
E) deceptive pricing
130) Basic to setting a product’s price is the extent of ________. This information is used in
estimating the revenues the firm expects to receive.
A) management’s commitment to the product relative to other products in the line
B) the product line into which it will be introduced
C) customer demand for it
D) the firm’s promotional budget
E) distribution requirements
131) Marketing executives must translate estimates of customer demand into estimates of
A) human and other resources required.
B) advertising expenditures that will be required.
C) ancillary product support.
D) revenues the firm expects to receive.
E) supply with a demand curve.
132) A demand curve is a graph that relates
A) the quantity sold and price, which shows the maximum number of units that will be sold at a
given price.
B) revenues and costs, which shows the minimum number of units that must be sold to break
even.
C) the quantity sold and revenues, which shows the minimum number of units that must be sold
in order to make a profit.
D) total production costs to various price points in order to determine how many units must be
sold in order to realize a predetermined profit.
E) primary demand to selective demand, which shows the growth of the market compared to
change in market share.
133) The maximum quantity of products consumers will buy at given price is shown by a
A) demand curve.
B) price constraint.
C) break-even point.
D) supply curve.
E) marginal revenue curve.
134) The horizontal axis of a demand curve graph represents
A) market growth rate.
B) relative market share.
C) price per unit.
D) potential profit in dollars.
E) quantity demanded.
135) The vertical axis of a demand curve graph represents
A) market growth rate.
B) relative market share.
C) price per unit.
D) potential profit in dollars.
E) quantity demanded.
136) A demand curve graph typically appears as
A) a parabola with the apex representing the highest price that can be charged without losing
customers.
B) a diagonal line going from upper left to lower right demonstrating that as price goes down,
demand goes up.
C) an inverted parabola with the lowest point representing the lowest price that can be charged
and still meet the company’s profit objectives.
D) a diagonal line going from lower left to upper right demonstrating that as prices go up,
demand goes up proportionately.
E) two intersecting lines that identify the point at which supply and demand are exactly the same.
137) A movement along a demand curve (up or down) for a product occurs ________, assuming
that other factors such as consumer tastes, price and availability of substitutes, and consumer
incomes remain unchanged.
A) when its price is lowered or increased and the quantity demanded for it correspondingly
increases or decreases
B) when its demand is lowered or increased and the price offered for it correspondingly increases
or decreases
C) when its demand and price are lowered
D) when its demand and price are increased
E) at the break-even point
138) Figure 13-4A above shows that when the price for Red Baron frozen cheese pizzas moves
from $8 to $6 per unit along the demand curve D1, the quantity demanded
A) increases from 2 to 3 million units per year.
B) decreases from 3 to 2 million units per year.
C) stays the same.
D) increases from 6 to 8 million units per year.
E) decreases from 8 to 6 million units per year.
139) Figure 13-4A above shows that when the price for Red Baron frozen cheese pizzas moves
from $8 to $6 per unit along the demand curve D1, the profit
A) increases from 6 to 8 million units per year.
B) decreases from 8 to 6 million units per year.
C) stays the same.
D) increases from $2 to $3 per unit.
E) cannot be determined; demand curves do not show a relationship to profit.
140) Which of the following illustrates movement along the demand curve?
A) Demand increases due to a drop in price.
B) Demand increases due to a competitor leaving the market.
C) Demand increases due to consumer tastes changing.
D) Demand increases due to a competitor increasing its prices.
E) Demand increases due to an increase in consumer incomes.
141) In Figure 13-4B above, the demand curve shifts from D2 to D3 (B). This most likely
represents
A) an increase in demand resulting from competitor or consumer changes.
B) an increase in demand that required a decrease in price.
C) no change in price and no change in demand.
D) no change in demand or price but a greater profit due to economies of scale.
E) a decrease in price from $8 to $6 per unit.
142) A shift of the demand curve from D2 to D3 in Figure 13-4B above indicates
A) fewer units are demanded at the given price.
B) more units are demanded at the given price.
C) the price has decreased.
D) the price has increased.
E) there is not enough information given to indicate what happened.
143) Which of the following would most likely account for the shift in the demand curve from
D2 to D3 shown in Figure 13-4B above?
A) The firm increased its prices and consumers perceived the value of the product to be greater.
B) There were more product substitutes available in the marketplace.
C) Competitors in the market lowered their prices.
D) A recession occurred that lowered consumers’ incomes.
E) The product became trendy among members of its target market.
144) Which of the following best illustrates a shift in the demand curve?
A) When prices remain the same, there is a significant decrease in profit.
B) As the price is raised, the quantity demanded increases, assuming all else stays the same.
C) When prices remain the same, there is an increase or decrease in demand.
D) As the price is lowered, the quantity demanded decreases, assuming all else stays the same.
E) An internal matter has forced a price change of some type, but it does not impact demand.
145) Factors that determine consumers’ willingness and ability to pay for products and services
are referred to as
A) supply factors.
B) demand factors.
C) affordability factors.
D) elasticity factors.
E) macro environmental factors.
146) Demand factors are
A) the number of consumers who can afford to purchase a product or service.
B) the price that should be charged for a given product.
C) elements that determine consumers’ willingness and ability to pay for products.
D) the number of consumers who want to purchase a product.
E) the number of consumers who can purchase a product.
147) All of the following are demand factors except which?
A) the price of similar products
B) consumer tastes
C) consumer income
D) the availability of similar products
E) the form of promotion
148) When estimating demand, price is not the only factor to be considered. Three other
elements are emphasized by economists, one of which is
A) consumer tastes.
B) legislative changes.
C) size of the target market.
D) current political stability.
E) promotional methods.
149) While consumer tastes and price and availability of similar products determine what
consumers want to buy, consumer income determines
A) where they buy.
B) the degree of brand loyalty.
C) the degree of repeat buys.
D) what they can buy.
E) their desire to buy.
150) Which of the following statements about the factors that influence demand is true?
A) As the availability of close substitutes increases, the demand for a product increases.
B) As real consumer income increases, the demand for a product increases.
C) As the price of close substitutes increases, the demand for a product declines.
D) Changing consumer tastes have little impact on the demand for a product.
E) As real consumer income decreases, the demand for a product increases.
151) Campbell Soup spent seven years and $55 million on a secret project to produce a line of
Intelligent Quisine (IQ) food products “scientifically proven to lower high levels of cholesterol,
blood sugar, and blood pressure.” The company was responding to the needs and desires
expressed by consumers. However, after 15 months in an Ohio test market, Campbell Soup
yanked the entire IQ line because
A) Progresso Soups got to the stores first with a similar product and dominated the shelf space.
B) the product’s claims were exaggerated and not backed up with scientific data.
C) the product was priced too high and there was too little product variety.
D) the price was too low, leaving the consumer believing that Campbell sacrificed taste for
nutrition.
E) a downturn in the economy shifted people’s desire from a healthy lifestyle to a desire for
home and comfort. The new soups were too different from the product they remembered as
children.
152) When it was launched, the BMW Streetcarver was the only skateboard with stabilizers and
wheel design based on BMW’s automobiles. This technology gave the BMW Streetcarver better
control at high speeds and around sharp turns than any other brand. The skateboard was priced at
$495, which left many consumers (especially young males) who might have wanted to buy the
Streetcarver unable to afford it. This inability to pay for the high-priced BMW-made skateboard
shows the effect of ________ on sales.
A) demand factors
B) macroeconomic environmental factors
C) barter factors
D) supply factors
E) exchange parameters
153) Mrs. Renfro’s, Inc., sells 25 different relishes in 45 states. Mrs. Renfro’s chipotle corn salsa
is so popular that the company cannot make enough to keep its resellers stocked. Its price of
$4.50 for a jar seems just right to consumers who savor its hot and spicy taste. The popularity of
hot and spicy food is an example of a ________ that Mrs. Renfro’s has taken advantage of to
make its product a success.
A) barter factor
B) demand factor
C) supply factor
D) consumer index
E) macroeconomic environmental factor