265) Which of the following statements about geographical adjustments to price is most
accurate?
A) In FOB origin pricing, the seller selects the mode of transportation.
B) In FOB with freight-allowed pricing, the seller must pay for all transportation costs.
C) Multiple-zone pricing is sometimes referred to as “spider web” pricing.
D) Basing-point pricing methods have been used in industries where freight expenses are a
significant part of the total cost to the buyer.
E) Geographical adjustments can be subject to government regulation if the firm cannot supply
objective data (lists of mountains, rivers, weather conditions, etc.) explaining why those
adjustments need to be made.
266) Five pricing practices are scrutinized because of potential unethical or illegal actions,
including which of these?
A) predatory pricing
B) discount pricing
C) lateral price fixing
D) regional rollback pricing
E) delayed payment pricing
267) All of the following are pricing practices that are closely scrutinized because of potential
unethical or illegal actions except which?
A) price discrimination
B) predatory pricing
C) showrooming
D) price fixing
E) deceptive pricing
268) A conspiracy among firms to set prices for a product is referred to as
A) price discrimination.
B) price fixing.
C) predatory pricing.
D) tying arrangements.
E) exclusive dealing.
269) Price fixing refers to
A) an arrangement a manufacturer makes with a reseller to handle only its products and not those
of a competitor.
B) the practice of charging a very low price for a product with the intent of driving competitors
out of business.
C) the practice of charging different prices to different buyers for goods of like grade and
quality.
D) a conspiracy among firms to set prices for a product.
E) a seller’s requirement that the purchaser of one product also buy another product in the line.
270) Price fixing is illegal under the
A) Sherman Act.
B) Consumer Goods Pricing Act.
C) Robinson-Patman Act.
D) Federal Trade Commission Act.
E) Clayton Act.
271) Two or more competitors explicitly or implicitly setting prices is referred to as
A) competitive collusion.
B) vertical price fixing.
C) horizontal price fixing.
D) lateral price fixing.
E) price cooperation.
272) Controlling agreements between independent buyers and sellers whereby sellers are
required to not sell products below a minimum retail price is called
A) competitive collusion.
B) price cooperation.
C) horizontal price fixing.
D) lateral price fixing.
E) vertical price fixing.
273) Vertical price fixing refers to
A) two or more competitors explicitly or implicitly setting prices.
B) the practice of charging different prices to different buyers for goods of like grade and
quality.
C) controlling agreements between independent buyers and sellers whereby sellers are required
to not sell products below a minimum retail price.
D) a conspiracy among firms to set prices for a product or service.
E) a seller’s requirement that the purchaser of one product also buy another product in the line.
274) 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
A) price discrimination.
B) predatory pricing.
C) a tying arrangement.
D) resale price maintenance.
E) exclusive dealing.
275) Resale price maintenance was declared illegal in 1975 under the
A) Sherman Act.
B) Consumer Goods Pricing Act.
C) Robinson-Patman Act.
D) Federal Trade Commission Act.
E) Clayton Act.
276) Mark Johnson, the manager of a discount consumer electronics store, was approached by
the manufacturer’s representative on behalf of a marketer of a popular and profitable line of DVD
storage racks. The manufacturer’s representative implied that if Johnson didn’t raise the retail
prices for the storage racks to those paid by the marketer’s nondiscount customers, Johnson’s
supply of racks would be severely curtailed. The manufacturer’s representative is guilty of
attempting
A) horizontal price fixing.
B) resale price maintenance.
C) price discrimination.
D) predatory pricing.
E) bait and switch pricing.
277) Price discrimination refers to
A) the practice of charging different prices to different buyers for goods of like grade and
quality.
B) an arrangement a manufacturer makes with a reseller to handle only its products and not those
of a competitor.
C) the practice of charging a very low price for a product with the intent of driving competitors
out of business.
D) a conspiracy among firms to set prices for a product or service.
E) a seller’s requirement that the purchaser of one product also buy another product in the line.
278) The practice of charging different prices to different buyers for goods of like grade and
quality is referred to as
A) horizontal price fixing.
B) resale price maintenance.
C) price discrimination.
D) predatory pricing.
E) bait and switch pricing.
279) Price discrimination is illegal under the
A) Sherman Act.
B) Consumer Goods Pricing Act.
C) Robinson-Patman Act.
D) Federal Trade Commission Act.
E) Anti-Competitive Act.
280) In one of its least favorite actions, Amazon.com was caught manipulating its prices. Avid
DVD buyers, buying in quantity for resale, found that the online retailer was offering different
customers different prices for the same DVD, and complained vociferously. Company officials
admitted that the company was trying to see how much it could charge for an item before buyers
balked. Amazon was caught attempting
A) horizontal price fixing.
B) price discrimination.
C) resale price maintenance.
D) predatory pricing.
E) bait and switch pricing.
281) The Robinson-Patman Act allows for price differentials to different customers under several
conditions. Which of the following practices would be permitted?
A) using price differentials when price differences charged to different customers do not exceed
the differences in the cost of manufacture, sale, or delivery resulting from different methods or
quantities in which such goods are sold or delivered to buyers
B) using price differentials when price differences are given on the basis of other family
businesses
C) using price differentials when charging different prices to different buyers for goods of like
grade or quality
D) using price differentials when charging different prices on the basis of religious affiliation
E) using price differentials when charging the original price for refurbished goods that have been
damaged or used and returned but repaired according to company specifications
282) The Robinson-Patman Act covers promotional allowances as well as discounts. To legally
offer promotional allowances to buyers, the seller must do so on a(n) ________ basis to all
buyers distributing the seller’s products.
A) proportionally equal
B) limited
C) disproportionally equal
D) geographical
E) across-the-board
283) Price deals that mislead consumers fall into the category of
A) predatory pricing.
B) deceptive pricing.
C) price discrimination.
D) caveat emptor.
E) resale price maintenance.
284) Advertising such as “Retail Value $100, Our Price $85” is deceptive if
A) a verified and substantial number of stores in the market area do not price the item at $100.
B) even one store in that retail chain does not price the item at $100.
C) a competitor is selling the same item for $75 on sale and the normal price is only $85.
D) there is not enough product on hand at that price to satisfy the needs of the store’s regular
customer traffic.
E) the markup on the original price is more than 200 percent.
285) A claim that a price is below a manufacturer’s suggested or list price may be deceptive if
A) the items for sale had been purchased from another retailer.
B) the items for sale were part of a manufacturer’s promotional allowance.
C) the items were part of a bulk order.
D) few or no sales occur at that price in a retailer’s market area.
E) the items were purchased from the manufacturer at a higher price and the sale was part of a
loss-leader promotion.
286) When a seller represents a price as reduced, the item must have been offered in good faith
at a higher price for a substantial previous period. Former price comparisons are deceptive if
A) the high price tags were from a previous owner or retailer and were purchased that way from
the reseller, even though that price didn’t originate at the store.
B) the items for sale were part of a manufacturer’s promotional allowance.
C) a high price was set for the purpose of establishing a reference for a price reduction.
D) the items for sale were available at the higher price for less than 30 days.
E) the items were purchased from the manufacturer at a higher price and the sale was part of a
loss-leader promotion.
287) Deceptive pricing practices are outlawed by legislation and enforced by which federal
agency?
A) Consumer Protection Agency
B) U.S. Department of Justice
C) Federal Communications Commission
D) U.S. Department of Commerce
E) Federal Trade Commission
288) The practice of offering a bargain that is conditional on the purchase of other products may
exist when a buyer is offered the “1-Cent Sales,” the “Buy 1, Get 1 Free,” or the “Get 2 for the
Price of 1″ deal. Such pricing is legal only if
A) the seller is using bundle pricing.
B) there is a reasonable amount of inventory to satisfy the needs of the retailers normal traffic
flow.
C) the first items are sold at the regular price, not a price inflated for the offer.
D) the product is not outdated.
E) the quantity available to the customer is not limited.
289) To promote their business, some psychics advertise on television free tarot-card readings
and other insights into their customers’ futures. Unfortunately, this “free reading” has cost some
unsuspecting callers as much as $700 in phone charges. This sort of pricing practice would be
primarily monitored by the
A) Consumer Protection Agency.
B) U.S. Department of Justice.
C) Federal Trade Commission.
D) Federal Communications Commission.
E) Consumer Product Safety Commission.
290) When a firm offers a very low price on a product to attract customers to a store and once in
the store the customer is persuaded to purchase a higher-priced item, the practice is referred to as
A) predatory pricing.
B) deceptive pricing.
C) price discrimination.
D) caveat emptor.
E) bait and switch.
291) A hardware store advertises a ⅜-inch Black and Decker Power Drill for $29.95. You enter
the store intending to purchase the drill. The salesperson informs you that they are all sold out.
She tells you that the “sale” drills were factory seconds and that if you are going to be doing any
kind of serious woodworking, you should buy the Model 3309, which sells for $49.99. This
scenario has elements of which type of illegal pricing practice?
A) predatory pricing
B) price discrimination
C) price fixing
D) bait and switch
E) conditional bargains
292) Which of the following statements about geographical pricing is most accurate?
A) Geographical pricing is generally legal and not normally a concern in the U.S. legal system.
B) Geographical pricing has come under more government scrutiny than any other pricing
policy.
C) FOB freight-allowed pricing practices are illegal.
D) FOB origin pricing is legal.
E) Basing-point pricing is the only form of geographical pricing that is not under some type of
legal restriction.
293) The practice of charging a very low price for a product with the intent of driving
competitors out of business is referred to as
A) price fixing.
B) predatory pricing.
C) price discrimination.
D) deceptive pricing.
E) geographical pricing.