suggests that refineries are using which of the following pricing methods?
a.
Price differentiation
b.
Base-point pricing
c.
Freight absorption pricing
d.
Transfer pricing
e.
Zone pricing
115. Suppose that the frozen foods division of Swanson purchases food trays and boxes from the packaging division. The
form of pricing used to charge the frozen foods division is called
a.
zone pricing.
b.
base-point pricing.
c.
business-unit pricing.
d.
transfer pricing.
e.
price discrimination.
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
116. When Cadillac buys headlights from Delco (both of which are divisions of General Motors), ____ pricing occurs.
a.
base-point
b.
zone
c.
transfer
d.
uniform geographic
e.
matrix
c
Moderate
MARK.PRID.16.19.06 – LO: 19–06
United States – BUSPROG: Analytic
A-Head: Pricing For Business Markets
Bloom’s: Application
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
117. Which of the following is not a method used to determine transfer prices?
a.
Discounted standard cost
b.
Actual full cost
c.
Standard full cost
d.
Cost plus investment
e.
Market-based cost
118. Suppose that the watchband department of Timex sells completed watchbands to the finished watch department. The
finished watch department is charged the price it would have to pay an outside watchband manufacturer less a discount to
reflect low sales and transportation costs. This method of pricing is called ____ pricing.
a.
b.
c.
d.
e.
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
119. Scenario 19.1
Use the following to answer the questions.
Concession Supply sells hotdogs, buns, and nacho ingredients to several major league ballparks across the country.
Currently, Concession Supply has the following pricing information for one case of hotdogs sold at Wrigley Field: Total
fixed costs = $1,200, Selling price = $16, and Variable costs = $6.
Refer to Scenario 19.1. To break even, Concession Supply should sell ____ cases of hot dogs per day at Wrigley Field.
a.
13
b.
120
c.
40
d.
200
e.
60
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
120. Scenario 19.1
Use the following to answer the questions.
Concession Supply sells hotdogs, buns, and nacho ingredients to several major league ballparks across the country.
Currently, Concession Supply has the following pricing information for one case of hotdogs sold at Wrigley Field: Total
fixed costs = $1,200, Selling price = $16, and Variable costs = $6.
Refer to Scenario 19.1. What is the breakeven point in dollar sales volume?
a.
$1,200
b.
$1,440
c.
$3,000
d.
$1,920
e.
$1,600
Moderate
121. Scenario 19.1
Use the following to answer the questions.
Concession Supply sells hotdogs, buns, and nacho ingredients to several major league ballparks across the country.
Currently, Concession Supply has the following pricing information for one case of hotdogs sold at Wrigley Field: Total
fixed costs = $1,200, Selling price = $16, and Variable costs = $6.
Refer to Scenario 19.1. If Concession Supply increased its price by 10 percent and experienced only a 2 percent decrease
in the demand for hotdogs, the demand would be
a.
inelastic.
b.
common.
c.
prestige.
d.
elastic.
e.
marginal.
a
Moderate
Moderate
122. Scenario 19.1
Use the following to answer the questions.
Concession Supply sells hotdogs, buns, and nacho ingredients to several major league ballparks across the country.
Currently, Concession Supply has the following pricing information for one case of hotdogs sold at Wrigley Field: Total
fixed costs = $1,200, Selling price = $16, and Variable costs = $6.
Refer to Scenario 19.1. If Concession Supply wanted to make a profit of $800 on each case, it would need to sell ____
cases.
a.
150
b.
300
c.
100
d.
75
e.
200
e
Moderate
123. Scenario 19.2
Use the following to answer the questions.
The BASF Chemical Company in Germany has developed a new rubberized coating. The product has an application for
cell phones and other hand-held electronic devices that gives them protection from falls and scratches. BASF plans to
market the product directly to businesses that manufacture the casings for these types of products. BASF currently uses a
system of salespeople headquartered in Germany, while its primary business customers are in China.
Refer to Scenario 19.2. BASF has decided to offer discounts to its businesses customers in the form of the following: For
each order of $100,000 or more during the next 90 days, the buyer will receive a rebate of 5 percent. This type of pricing
would be an example of ____ discounts.
a.
allowance
b.
cash
c.
seasonal
d.
noncumulative
e.
cumulative
e
Challenging
124. Scenario 19.2
Use the following to answer the questions.
The BASF Chemical Company in Germany has developed a new rubberized coating. The product has an application for
cell phones and other hand-held electronic devices that gives them protection from falls and scratches. BASF plans to
market the product directly to businesses that manufacture the casings for these types of products. BASF currently uses a
system of salespeople headquartered in Germany, while its primary business customers are in China.
Refer to Scenario 19.2. BASF is considering the problem of actual distance in delivering its product from the plant in
Germany to some of its customers in China. Which pricing strategy would help overcome this problem?
a.
Geographic
b.
Transfer
c.
Commercial
d.
Transit
e.
Factory
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
125. Scenario 19.2
Use the following to answer the questions.
The BASF Chemical Company in Germany has developed a new rubberized coating. The product has an application for
cell phones and other hand-held electronic devices that gives them protection from falls and scratches. BASF plans to
market the product directly to businesses that manufacture the casings for these types of products. BASF currently uses a
system of salespeople headquartered in Germany, while its primary business customers are in China.
Refer to Scenario 19.2. If BASF were to employ pricing that includes the price at the factory plus freight charges from a
chosen point nearest the buyer, this would be an example of ____ pricing.
a.
factory plus
b.
dispersion
c.
base-point
d.
freight absorption
e.
uniform geographic
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
A-Head: Pricing For Business Markets
Bloom’s: Application
126. Scenario 19.2
Use the following to answer the questions.
The BASF Chemical Company in Germany has developed a new rubberized coating. The product has an application for
cell phones and other hand-held electronic devices that gives them protection from falls and scratches. BASF plans to
market the product directly to businesses that manufacture the casings for these types of products. BASF currently uses a
system of salespeople headquartered in Germany, while its primary business customers are in China.
Refer to Scenario 19.2. If BASF were to price its product in barrels from the factory, before it is loaded on the carrier, this
would be an example of ____ pricing.
a.
buy-back allowance
b.
geographic
c.
F.O.B destination
d.
F.O.B. factory
e.
base-point
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
127. Price is the value that is exchanged for products in a marketing transaction.
a.
True
b.
False
True
Easy
MARK.PRID.16.19.01 – LO: 19–01
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
A-Head: The Importance Of Price In Marketing
Bloom’s: Knowledge
128. Barter is the oldest form of exchange.
a.
True
b.
False
True
Easy
MARK.PRID.16.19.01 – LO: 19–01
United States – BUSPROG: Analytic
United States – AK – DISC: Pricing
Bloom’s: Application
129. Price should be defined in terms of money only.
a.
True
b.
False
False
Easy
130. The value of an idea cannot be assessed by price.
a.
True
b.
False
False
Moderate
131. The purpose of the pricing concept is to quantify and express the value of items in a market exchange.
a.
True
b.
False
True
Moderate
132. Marketers have more difficulty adjusting their prices than they do any other marketing mix variable.
a.
True
b.
False
False
Easy
133. Price is the most easily adjusted ingredient in the marketing mix.
a.
True
b.
False
True
Easy
134. The major disadvantage of using price competition is that it takes a long time to implement the changes in price.
a.
True
b.
False
False
Moderate
135. Price is a crucial marketing mix component.
a.
True
b.
False
True
Easy
136. Total costs are influenced by quantities sold.
a.
True
b.
False
True
137. Profits for a firm are computed as follows: Profits = Total Revenue – Fixed Costs.
a.
True
b.
False
False
Moderate
138. Price is a major component of the profit equation.
a.
True
b.
False
True
Easy
139. A seller can change prices quickly in a price-competition situation.
a.
True
b.
False
True
Easy
140. A firm that competes on a price basis is unable to change prices frequently.
a.
True
b.
False
Easy
141. Price competition is a very flexible marketing strategy.
a.
True
b.
False
True
Easy
142. Nonprice competition emphasizes distinctive product features, service, and product quality.
a.
True
b.
False
True
Easy
143. Nonprice competition does not permit unique product features, higher product quality, and customer service.
a.
True
b.
False
False
Moderate
144. Nonprice competition allows a company to increase its brand’s unit sales through means other than changing the
False
Moderate
brand’s price.
a.
True
b.
False
145. Nonprice competition can be used to establish brand loyalty.
a.
True
b.
False
True
Moderate
146. Brand uniqueness is not important in nonprice competition.
a.
True
b.
False
False
Easy
147. Sellers using nonprice competition are not concerned with prices charged by competitors.
a.
True
b.
False
False
Moderate
True
Easy
148. Demand is best determined by a top management committee.
a.
True
b.
False
False
Moderate
149. For most products, the quantity demanded goes up as the price goes down.
a.
True
b.
False
True
Easy
150. Demand depends only on the price of the product.
a.
True
b.
False
False
Moderate
151. With prestige products, a firm will always be able to sell more at a higher price.
a.
True
b.
False
False
Moderate
152. The idea behind prestige demand is that many prestige products seem to sell better at a high price than at a low price.
a.
True
b.
False
True
Moderate
153. Changes in buyers’ attitudes, other components of the marketing mix, and uncontrollable environmental factors can
influence demand.
a.
True
b.
False
True
Moderate
154. Price elasticity of demand measures the sensitivity of demand to changes in price.
a.
True
b.
False
True
Easy
155. Electricity is an example of a product that is price elastic.
a.
True
b.
False
False
156. Pricing decisions can be based on determining whether the demand for a product is price elastic or price inelastic.
a.
True
b.
False
True
Moderate
157. If demand is elastic, a change in price causes a parallel change in total revenue.
a.
True
b.
False
False
Moderate
158. Elastic demand is usually a result of the lack of substitute products.
a.
True
b.
False
False
Moderate
159. Product demand usually becomes more elastic over time because more substitutes are found.
a.
True
b.
False
Moderate