55. At what point does a firm maximize profit?
a.
The point at which marginal cost equals marginal revenue
b.
The point at which the firm sells its product at the highest price
c.
The breakeven point plus the adjusted marginal cost
d.
The point at which marginal profits equal marginal revenue
e.
The point at which marginal cost equals marginal profits
56. When marginal cost is equal to marginal revenue, the firm should
a.
produce more to increase profits.
b.
produce less to decrease total costs.
c.
stop producing additional units to maximize profits.
d.
provide discounts to encourage purchases.
e.
intensify distribution to increase sales.
MARK.PRID.16.19.04 – LO: 19–04
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Demand, Cost, And Profit Relationships
Bloom’s: Comprehension
57. If Colgate-Palmolive wants to maximize profit on its toothpaste, it should operate at the point where
a.
total costs and total revenues are equal.
b.
marginal revenue is at its highest level.
c.
marginal revenue exceeds marginal cost.
d.
marginal revenue equals marginal cost.
e.
demand is most elastic.
MARK.PRID.16.19.04 – LO: 19–04
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Demand, Cost, And Profit Relationships
Bloom’s: Application
58. At the breakeven point,
MARK.PRID.16.19.04 – LO: 19–04
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Demand, Cost, And Profit Relationships
Bloom’s: Knowledge
a.
the money a company brings in from selling products equals the amount spent producing the products.
b.
the total fixed costs are exactly equal to the total variable costs.
c.
profits are exactly equal to the difference between revenue and total variable costs.
d.
the marginal revenue of a product is exactly equal to the marginal cost of producing one more unit.
e.
the marginal cost curve and the average cost curve will be identical for a particular product.
59. Jared is developing a business plan for a new type of bicycle helmet. He is interested in finding the point at which the
costs of producing the helmet will equal the revenue earned from selling the product. Jared is interested in finding the
a.
b.
c.
d.
e.
Easy
MARK.PRID.16.19.04 – LO: 19–04
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Demand, Cost, And Profit Relationships
Bloom’s: Application
60. Suppose managers at Caterpillar have determined the costs associated with producing hay balers are equal to the price
that they charge for the hay balers. This indicates that Caterpillar is producing at the ____ point.
a.
breakeven
b.
marginal revenue less than marginal cost
c.
profit margin
d.
competitive price
e.
profit maximizing
a
Moderate
MARK.PRID.16.19.04 – LO: 19–04
United States – BUSPROG: Analytic
A-Head: Demand, Cost, And Profit Relationships
Bloom’s: Application
a
Moderate
MARK.PRID.16.19.04 – LO: 19–04
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Demand, Cost, And Profit Relationships
Bloom’s: Knowledge
61. To determine the breakeven point in units, divide the fixed costs by
a.
total costs.
b.
variable costs time price.
c.
price minus variable costs.
d.
price per unit.
e.
total revenue minus fixed costs.
62. If the product price is $100, average variable cost $40 per unit, and the total fixed costs are $120,000, what is the
breakeven point?
a.
500 units
b.
2,000 units
c.
1,200 units
d.
300 units
e.
3,000 units
MARK.PRID.16.19.04 – LO: 19–04
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Demand, Cost, And Profit Relationships
Bloom’s: Application
63. Markum Industries determines that for its air compressors the following results are achieved at a price of $250: total
costs = $250,000; variable costs per unit = $100; fixed costs = $175,000. Given these figures, Markum would break even
at ____ units.
a.
1,167
b.
1,000
c.
1,750
d.
2,500
e.
700
a
Challenging
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Demand, Cost, And Profit Relationships
Challenging
MARK.PRID.16.19.04 – LO: 19–04
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Demand, Cost, And Profit Relationships
Bloom’s: Knowledge
64. A certain location of O’Charley’s Restaurant has annual fixed costs of $200,000. If an average tab at the restaurant is
$60 and the variable costs per tab is $20, how many groups of customers must O’Charley’s serve per year in order to break
even?
a.
2,000
b.
5,000
c.
10,000
d.
3,333
e.
2,500
Moderate
MARK.PRID.16.19.04 – LO: 19–04
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Demand, Cost, And Profit Relationships
Bloom’s: Application
65. The Highland Racquet Club found that with annual fixed costs of $60,000, its breakeven point is 2,000 members when
the membership charge is $60 per person per year. What is the variable cost per person for Highland?
a.
$45
b.
$50
c.
$30
d.
$25
e.
$40
c
Moderate
MARK.PRID.16.19.04 – LO: 19–04
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Demand, Cost, And Profit Relationships
Bloom’s: Application
66. Abby is marketing consultant who specializes in small businesses. Her current client is very interested in estimating
the costs for the coming year, in order to find the breakeven point. Abby knows this is an important financial statistic
because below the breakeven point, the firm is operating
a.
with fixed costs only.
b.
with minimal variable costs.
c.
with no revenue.
d.
with minimal profit.
e.
at a loss.
e
Moderate
MARK.PRID.16.19.04 – LO: 19–04
Bloom’s: Application
67. What assumption does breakeven analysis make that limits its overall usefulness?
a.
It focuses on how to achieve a price objective.
b.
It assumes a company wants to gain a certain market share.
c.
It relies on demand for a product being inelastic.
d.
It focuses only on competitive factors and not costs.
e.
It assumes demand is elastic for the product.
c
Moderate
MARK.PRID.16.19.04 – LO: 19–04
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Demand, Cost, And Profit Relationships
Bloom’s: Knowledge
68. Which factor is least likely to affect pricing decisions?
a.
Competitive prices
b.
Legal and regulatory issues
c.
Organizational and marketing objectives
d.
Customers’ interpretation and response
e.
Shifting stock values
e
Moderate
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Knowledge
69. Which of the following is not a major factor for firms making price decisions?
a.
Costs
b.
Competition
c.
Previous sales
d.
Channel member expectations
e.
Legal and regulatory issues
c
Moderate
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Demand, Cost, And Profit Relationships
Bloom’s: Application
70. A company trying to position itself as value oriented should not
a.
set prices that are reasonable relative to product quality.
b.
use premium pricing for its products.
c.
set prices similar to those of its competitors.
d.
use any advertising for its products.
e.
consider costs when determining the price of products.
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Knowledge
71. Mars Petcare is one of the world’s largest pet food manufacturers. If the strategic goal for Mars Petcare in the coming
year was to ___________ in North America, it should use temporary price reductions.
a.
increase the number of competitors.
b.
gain market share.
c.
decrease volume sold.
d.
increase revenue per item.
e.
decrease the number of competitors.
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Application
72. Duds and Suds is a bar with a country and western atmosphere. In addition to the bar, Duds and Suds has a gift shop
that sells western clothing with its logo. Norman is the owner of the business and has recently enacted temporary price
reductions through clearance sales, discounts, and nightly drink specials. What is Norman most likely trying to do?
a.
raise cash quickly.
b.
decrease costs.
c.
increase profitability.
d.
run off the competition.
e.
create a value image.
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Knowledge
73. Marketers generally view ____ as the minimum price a product can be sold for.
a.
fixed costs
b.
variable costs
c.
profits
d.
costs
e.
moderate losses
Easy
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Knowledge
74. In the long run, the J. F. Smucker Company must view ____ as the absolute lowest price for its Jif brand peanut butter.
a.
a 10 percent return on investment
b.
product development costs
c.
total costs
d.
advertising expenditures
e.
Nestlé’s prices
c
Moderate
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Application
75. To maintain market share and revenue in an increasingly price-sensitive market, companies have focused on quality,
used labor-saving technologies, and used efficient manufacturing processes. These tactics have provided gains in
productivity that have translated into ____ for the consumer.
a.
higher costs for the company and higher prices
b.
higher costs for the company and lower prices
c.
lower costs for the company and lower prices
d.
lower costs for the company and higher prices
e.
no change in the costs for either the company or
c
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Application
76. For most consumers, there is an assumed relationship between
a.
price and quality.
b.
value and cost.
c.
internal and external reference prices.
d.
value and price consciousness.
e.
prestige prices and value.
a
Moderate
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Knowledge
77. Premium-priced products are usually marketed through
a.
complex marketing channels.
b.
intensive or selective distribution.
c.
exclusive or intensive distribution.
d.
exclusive distribution only.
e.
selective or exclusive distribution.
e
Moderate
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
Bloom’s: Knowledge
78. Since Victoria’s Secret has decided to use nonprice competition, it distinguishes its brand through all but which of the
following?
a.
distinctive product features.
b.
exceptional service.
c.
rebates.
d.
variety and selection.
e.
product quality and style.
c
Moderate
Moderate
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Knowledge
79. The types of prices that appear most often in ads are ___; while the types of prices that occur least often in ads are
____ prices.
a.
reference; comparison
b.
discount; cost-plus
c.
bargain; premium
d.
comparison; cost-plus
e.
sale; reference
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Comprehension
80. Which of the following products is most likely to involve personal selling?
a.
Blenders at a department store
b.
Riding lawn mowers
c.
Kindle Fire
d.
Picture frames at a hobby supply store
e.
Footballs at a sporting goods store
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Application
81. The amount of profit a channel member expects depends on
a.
the amount of discounts for large orders provided by the producers.
b.
the number of channel support activities provided by the producers.
c.
what the intermediary could earn if it were handling a competing product instead.
d.
the type of distribution channels involved.
e.
the amount of effort required to carry the product.
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Application
82. What a price means or what it communicates to customers is called
a.
reference.
b.
response.
c.
interpretation.
d.
internalization.
e.
signaling.
c
Easy
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Knowledge
83. The degree to which the price of a product enhances a customer’s satisfaction with the purchase experience and with
the product after the purchase is part of their
a.
response.
b.
reference.
c.
interpretation.
d.
price satisfaction.
e.
price-consciousness.
a
Easy
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Knowledge
84. Generally, customers are most likely to rely on the price-quality association when
a.
they cannot judge the quality of the product for themselves.
b.
the product is a well-known brand.
c.
customers can judge the product’s quality for themselves.
d.
the product is purchased through the use of the Internet.
e.
products are being purchased from well-established retailers that are familiar to customers.
a
Moderate
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Knowledge
85. To gain market share, when Hyundai first entered the U.S. car market it did so with a comparatively low pricing
strategy. One of the negative side effects of making this pricing decision is
a.
a negative impact on consumers’ perceptions of quality.
b.
difficulty raising the prices later.
c.
a high return on investment level affecting tax balances owed.
d.
poor survival chances.
e.
higher developmental costs.
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Application
86. A price developed in the consumer’s mind through experience with the product is called a(n)
a.
external reference price.
b.
value-price guideline.
c.
frame of reference.
d.
internalized price.
e.
internal reference price.
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Knowledge
87. When a customer is considering the purchase of a product in a less-familiar product category, that individual is likely
to rely more heavily on
a.
internal reference prices.
b.
symbol prices.
c.
high value products.
d.
discounted reference prices.
e.
external reference prices.
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Customer
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Knowledge
88. Lucy buys a new dress at T.J. Maxx that has a price tag with “Compare at $150.00. Our Price $89.99.” This is an
example of the use of
a.
internal referencing.
b.
cumulative discounts.
c.
seasonal discounts.
d.
base-point pricing.
e.
an external reference price.
e
Moderate
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Application
89. Vanessa is shopping for a new pair of athletic shoes. Since she is concerned about both the price and the quality
aspects of a product, Vanessa is most likely a ___ consumer.
a.
Price-conscious
b.
Prestige-sensitive
c.
Value-conscious
d.
Price-conscious and prestige-sensitive
e.
Quality-conscious
c
Moderate
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Application
90. Buyers who focus on purchasing products that signify prominence and status are
a.
value-conscious consumers.
b.
price-conscious consumers.
c.
socially elite buyers.
d.
prestige-sensitive buyers.
e.
brand aware consumers.
Moderate
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Knowledge
91. Nicole is out shopping with her friends for the day. While evaluating a decision to purchase a handbag, she says,
“People notice when you buy the most expensive brand of a product.” Nicole is most likely a _____ consumer.
a.
price-conscious
b.
quality-conscious
c.
value-conscious
d.
socially conscious
e.
prestige-sensitive
e
Moderate
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Application
92. ACE Electronics introduces a new voice-activated personal computer that no longer requires a keyboard. ACE charges
the high price of $11,000 per unit, thus generating large profits because it has a 20 percent market share. ACE’s major
problem in the future will most likely be
a.
survival.
b.
cash flow.
c.
competition.
d.
return on investment.
e.
profit.
c
Challenging
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Application
93. Monopolies usually keep their prices at a level that generate a reasonable, but not excessive, return primarily because
a.
they want to avoid new competitors entering their market.
b.
they want to avoid government regulations on their pricing.
c.
they try to satisfy the demands of value-conscious consumers.
d.
firms can increase market share more rapidly this way.
Easy
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Knowledge
e.
customers will discontinue use of these products if prices rise.
94. Marketers have no flexibility in setting prices under conditions of
a.
a monopoly.
b.
an oligopoly.
c.
perfect competition.
d.
monopolistic competition.
e.
no competition.
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Knowledge
95. The ____ prohibits price fixing among firms in an industry.
a.
Sherman Antitrust Act
b.
Federal Trade Commission Act
c.
Wheeler-Lea Act
d.
Robinson-Patman Act
e.
Clayton Act
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Ethics
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Knowledge
96. Which of the following acts does not directly affect pricing decisions?
a.
Sherman Antitrust Act
b.
Federal Trade Commission Act
c.
Wheeler-Lea Act
d.
Clayton Act
e.
Simpson-Marshall Act
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Knowledge
97. Both the Federal Trade Commission Act and the Wheeler-Lea Act prohibit
a.
freezing prices.
b.
independent pricing policies.
c.
deceptive pricing.
d.
price fixing.
e.
price differentials.
c
Challenging
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Ethics
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Knowledge
98. If a company provides price differentials that harm competition by giving one or more buyers a competitive
advantage, it is committing
a.
price discrimination.
b.
price-consciousness.
c.
functional discounting.
d.
price competition.
e.
price fixing.
a
Moderate
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Ethics
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Knowledge
99. Which of the following prohibits price discrimination that lessens competition among wholesalers and retailers?
a.
Sherman Antitrust Act
b.
Robinson-Patman Act
c.
Lanham Trademark Act
d.
Federal Trade Commission Act
e.
Wheeler-Lea Act
e
Moderate
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Comprehension
100. Provisions of the Robinson-Patman Act, as well as those of the ____, limit the use of price differentials.
a.
Simpson-Marshall Act
b.
Federal Trade Commission Act
c.
Wheeler-Lea Act
d.
Clayton Act
e.
Sherman Antitrust Act
Moderate
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Ethics
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Knowledge
101. Which of the following is not a discount provided to business customers?
a.
Trade
b.
Cumulative
c.
Cash
d.
Seasonal
e.
Differentiated
e
Moderate
MARK.PRID.16.19.06 – LO: 19–06
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Pricing For Business Markets
Bloom’s: Knowledge
102. What type of discount is given to a business purchaser for performing activities such as transporting, storing, and
selling?
a.
Quantity
b.
Cash
c.
Geographic
d.
Service
e.
Trade
Moderate
MARK.PRID.16.19.05 – LO: 19–05
United States – BUSPROG: Ethics
United States – AK – DISC: Pricing
A-Head: Factors That Affect Pricing Decisions
Bloom’s: Knowledge
103. The Panama Jack Company utilizes a special strategy to sell its ECO-shirt line. Its basic promotional tool is the
discount. These discounts offered to middlemen for performing certain channel activities are referred to as ____
discounts.
a.
trade
b.
cumulative
c.
noncumulative
d.
push
e.
intermediary
a
Moderate
104. Laura Spangler, of North Central Novelties, reduces the price of games sold to Robertson’s Entertainment by 10
percent to allow for expenses associated with Robertson’s promoting the games to consumers. This is an example of a
____ discount.
a.
quantity
b.
cash
c.
seasonal
d.
trade
e.
complementary
Moderate
105. If Ralph Lauren offers to reduce the price of its women’s blazers when retailers buy more than 100 pieces, the
designer is offering a ____ discount.
a.
quantity
b.
cash
e
Moderate
c.
seasonal
d.
trade
e.
complementary
106. A deduction from list price for purchasing large quantities aggregated over a stated period of time is a
a.
noncumulative quantity discount.
b.
additive cash discount.
c.
cumulative quantity discount.
d.
cumulative discount allowance.
e.
additive quantity reduction.
c
Moderate
MARK.PRID.16.19.06 – LO: 19–06
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Pricing For Business Markets
Bloom’s: Knowledge
107. Justin, a sales representative for Serta Mattress manufacturers, phones Kirk of Southside Furniture to inform him that
if he will increase his recent order of 15 mattress sets to 20, he will receive a 14 percent price reduction. This offer is due
to a recent overstock condition at the factory and will not be available in the future. The discount offered here is
a.
cash.
b.
noncumulative.
c.
seasonal.
d.
trade.
e.
cumulative.
Challenging
MARK.PRID.16.19.06 – LO: 19–06
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Pricing For Business Markets
108. Tim O’Brien gets the invoice for a load of gravel he purchased last week. The price of the gravel was $55, and the
terms are 2/10, n/45. If Tim pays the invoice in five weeks, he will owe
a
Moderate
MARK.PRID.16.19.06 – LO: 19–06
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Pricing For Business Markets
Bloom’s: Application
a.
a penalty.
b.
$53.90.
c.
$56.10.
d.
$58.30.
e.
$55.00.
109. If the terms of a business exchange are 2/10 net 30, this means that the transaction
a.
involves a cumulative discount if paid in 30 days.
b.
involves a noncumulative discount.
c.
offers a discount if the buyer lives within a ten-mile radius.
d.
price does not include the cost of freight.
e.
involves a cash discount if paid within ten days.
e
Moderate
MARK.PRID.16.19.06 – LO: 19–06
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Pricing For Business Markets
Bloom’s: Application
110. A concession in price in business markets to achieve a desired goal is called a(n)
a.
allowance.
b.
objective-oriented discount.
c.
cash discount.
d.
trade discount.
e.
cumulative discount.
a
Moderate
MARK.PRID.16.19.06 – LO: 19–06
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
Bloom’s: Knowledge
111. Reductions for transportation and other costs related to the physical distance between buyer and seller are known as
a.
base-point pricing.
b.
freight absorption pricing.
e
Challenging
MARK.PRID.16.19.06 – LO: 19–06
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Pricing For Business Markets
Bloom’s: Application
c.
price zoning.
d.
location pricing.
e.
geographic pricing.
112. If a retailer orders a quantity of merchandise to be delivered to his store in Phoenix and is quoted a price that does not
include shipping charges, the retailer is paying a(n) ____ price.
a.
F.O.B. destination
b.
F.O.B. factory
c.
transfer
d.
postage-stamp
e.
base-point
Challenging
MARK.PRID.16.19.06 – LO: 19–06
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Pricing For Business Markets
Bloom’s: Application
113. Ryan orders 16 dozen fishing lures from Strike Right for $375. When he gets the invoice, he is furious that $25 in
freight charges has been tacked onto his bill because he thought the price included freight costs. Ryan should have been
certain that the order terms were
a.
F.O.B. origin.
b.
F.O.B. factory.
c.
C.O.D.
d.
2/10, n/30.
e.
F.O.B. destination.
e
Challenging
MARK.PRID.16.19.06 – LO: 19–06
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Pricing For Business Markets
Bloom’s: Application
114. The fact that a gas station in Texas pays less for fuel than a gas station in Maine from a producer in Louisiana
e
Easy
MARK.PRID.16.19.06 – LO: 19–06
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: Pricing For Business Markets
Bloom’s: Knowledge