61. Dumping occurs when
A. prices for products are lowered to the point at which revenue just covers costs.
B. a product is exported to a foreign country because demand for the product domestically has waned.
62. The strategy in which a company sells its exports to another country at a lower price than it sells the same product in its
domestic market is referred to as
A. mass exporting.
B. survival pricing.
63. As noted in your text, producers in which country were accused of dumping by selling silk at unreasonably low prices?
64. According to your text, which of the elements of the marketing mix is one of the most watched and regulated activities?
A. place
B. product
65. Located on a college campus, Ben’s Burger Barn charges $4.99 for its burger basket. However, students receive a 10%
discount off the price for showing their student ID. This is an example of
A. price inflation.
B. price fixing.
66. The practice of charging different customers different prices for the same product is called
A. price fixing.
B. price inflation.
67. The three largest manufacturers of solenoid valves for plumbing applications conspired together so that all three firms would
charge the same price for a 3-way valve. This is an example of
A. price inflation.
B. predatory pricing.
68. A new Home Depot opened up down the street from Hank‘s Hardware and has drastically reduced prices on many of the
same products that Hank sells, forcing him to go out of business. After Hank closed his store, he noticed that Home Depot
began raising its prices to more normal levels. This is an example of
69. Because it could be considered an attempt to create a monopoly, which pricing strategy is illegal under U.S. law but is
difficult to prove?
70. Deceptive pricing involves
A. adding hidden taxes to products that are imported or exported.
B. two or more companies colluding to set a product’s price.
71. A retailer inflated the price of its leather jackets so that when it put the jackets on sale, it appeared to customers that they
were getting a better deal than they really were. This is an example of what pricing strategy?
A. predatory pricing
B. price discrimination
72. All of the following are legal under the Robinson-Patman Act except
A. charging different prices as a result of a going–out–of-business sale.
B. charging different prices if it is part of a quantity discount program.
73. The Robinson-Patman Act was passed in 1936 and
74. Which of the following established the Federal Trade Commission, giving it the authority to enforce laws aimed at prohibiting
unfair methods of competition?
75. Which of the following is also called the Advertising Act?
A. the Anti-Price Discrimination Act
B. the Clayton Antitrust Act
76. Because it reflects the value the product delivers to consumers as well as the value it captures for the firm, _______ is one
of the most important strategic decisions a firm faces.
77. The objective of strategic pricing is _______.
78. The first step in setting price is to clearly define the pricing _______.
79. _____ _____ is a pricing strategy that involves setting a relatively high price for a period of time after the product launches.
80. Useful as a temporary means of staying in business, _______ pricing is the process of lowering prices to the point at which
revenue just covers costs, allowing the business to endure a difficult time.
81. Marketers have to project the specific demand for their product at various price points knowing that the price of a product
affects consumers’ purchasing behavior. This is the idea behind the concept of price _______.
82. The percentage change in quantity demanded in response to a percentage change in price is referred to as price _______ of
demand.
83. The Daily Gazette charges $1.00 for its newspaper and has 150,000 subscribers. The publishers decided to reduce the price
of the paper to $0.75 in hopes of attracting new subscribers. However, the price reduction resulted in only 500 new subscribers.
This represents demand that is _______.
84. Prices are generally more _______ in the early stages of the product life cycle.
85. Southwest Airlines offered a summer sale in which it reduced its domestic flights by a small percentage. Because of this
decrease in price, there was a significant increase in quantity demanded. This is an example of _______ demand.
10–29
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard
Learning Objective: 10-02 Outline the objectives, steps, and decisions involved in setting price.
Topic: Price Elasticity of Demand
86. Costs that remain constant and do not vary based on the number of units produced or sold are called _______ costs.
87. Marcelo is preparing a monthly report for his supervisor regarding plant operations. While Marcelo is happy to report that
production increased by 20% this month, he needs to let his supervisor know that material charges, delivery costs and utilities to
run the plant also increased significantly. These represent the plant’s _______ costs.
88. If the costs of producing a product equal the revenue made from selling the product, a firm has achieved the _____ _____
point.
89. While break-even analysis analyzes the costs of sales, it fails to take into consideration consumers’ _____ to price.
90. In a market structure in which there are a large number of buyers and sellers, the pricing impact of any single firm will be
fairly _______.
91. Freshpet is a manufacturer of fresh, all-natural dog and cat food. The company conducted a survey and found that
customers considered $25.00 for its 3-lb bag of complete meals to be reasonable since the product is made in the U.S.A. from
fresh, all-natural ingredients. For Freshpet, $25.00 represents its targeted consumers‘ _______ price.
92. ________ prices are the prices that consumers consider reasonable and fair for a product.
93. One of the most common mistakes in modern pricing is charging someone less than they are willing to pay, which is referred
to as _______.
94. Two of the most common and effective strategies for raising prices are unbundling and _______ clauses.
95. A computer manufacturer that used to sell its computer, monitor, and keyboard for one packaged price now sells each item
separately. This is an example of _______.
10–32
Difficulty: 3 Hard
Learning Objective: 10-02 Outline the objectives, steps, and decisions involved in setting price.
Topic: Setting Prices
96. A section in a contract that ensures that providers of goods and services do not encounter unreasonable financial hardship
as a result of uncontrollable increases in the costs of or decreases in the availability of something required to deliver products to
customers is called a(n) _______ clause.
97. _______ pricing is one of the most commonly used pricing tactics, largely because it is easy, but it is not very effective at
maximizing profits.
98. _____ _____ is the amount a product sells for above the total cost of the product itself.
99. The average price of a suit purchased at Men’s Wearhouse is $349.99. This is most likely a(n) _______ pricing tactic.
100. Firms that want to promote an image of superior quality and exclusivity to customers would most likely pursue a ________
pricing strategy.
101. Roland owns a sporting goods store in the Midwest. During the winter months, he prices his baseball and camping gear at
reduced prices in hopes of selling the equipment year-round. This is an example of a(n) _______ discount.
102. Packaging two or more products together and charging a single price is referred to as price _______.
10–34
Difficulty: 1 Easy
Learning Objective: 10-03 Compare the pricing tactics marketers can use.
Topic: Pricing Tactics
103. Through the use of the Internet and mobile price comparison applications, ________ has helped to shift the balance of
power from companies to customers.
104. Constantly updating prices to reflect changes in supply, demand, or market conditions is a pricing strategy called _______
pricing.
105. Priceline.com is a type of “name-your-own-price” _____ site where a consumer submits a bid at the price he or she is
willing to pay for a product or service.