16) Walmart is famous for using what important type of value pricing?
A) competition-based pricing
B) everyday low pricing
C) cost-plus pricing
D) break-even pricing
E) penetration pricing
Answer: B
Diff: 2 Page Ref: 293
Skill: Concept
Objective: 10-2
17) ________ involves charging a constant, everyday low price with few or no temporary price discounts.
A) High-low pricing
B) Target pricing
C) Cost-plus pricing
D) EDLP
E) Penetration pricing
Answer: D
Diff: 2 Page Ref: 293
Skill: Concept
Objective: 10-2
18) ________ involves attaching features and services to differentiate a company's offers and to support charging higher prices.
A) Break-even pricing
B) Target pricing
C) Value-added pricing
D) Cost-plus pricing
E) Pricing-down
Answer: C
Diff: 1 Page Ref: 293
Skill: Concept
Objective: 10-2
19) When there is price competition, many companies adopt ________ rather than cutting prices to match competitors.
A) pricing power
B) value-added strategies
C) fixed costs
D) price elasticity
E) image pricing
Answer: B
Diff: 2 Page Ref: 293
Skill: Concept
Objective: 10-2
20) Ryanair offers free flights to a quarter of its customers and rock-bottom prices to many of its other customers. Ryanair then charges for all extra services, such as baggage handling and in-flight refreshments. Which of the following best describes Ryanair's pricing method?
A) value-added pricing
B) good-value pricing
C) cost-plus pricing
D) high-low pricing
E) image pricing
Answer: B
Diff: 2 Page Ref: 293
Skill: Concept
Objective: 10-2
21) ________ pricing involves setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for the company's efforts and risks.
A) Value-based
B) Fixed cost
C) Cost-based
D) Variable
E) Skimming
Answer: C
Diff: 1 Page Ref: 295
Skill: Concept
Objective: 10-2
22) Fixed costs ________ as the number of units produced increases.
A) decrease
B) increase
C) divide in half
D) remain the same
E) increase at a diminishing rate
Answer: D
Diff: 1 Page Ref: 296
Skill: Concept
Objective: 10-2
23) Costs that do not vary with production or sales level are referred to as ________.
A) fixed costs
B) variable costs
C) target costs
D) total costs
E) unit costs
Answer: A
Diff: 1 Page Ref: 296
Skill: Concept
Objective: 10-2
24) Rent, electricity, and executive salaries are examples of ________.
A) fixed costs
B) variable costs
C) accumulated costs
D) total costs
E) marketing costs
Answer: A
Diff: 2 Page Ref: 296
Skill: Concept
Objective: 10-2
25) Costs that vary directly with the level of production are referred to as ________.
A) fixed costs
B) variable costs
C) target costs
D) total costs
E) unit costs
Answer: B
Diff: 1 Page Ref: 296
Skill: Concept
Objective: 10-2
26) ________ are the sum of the ________ and ________ for any given level of production.
A) Fixed costs; variable; total costs
B) Fixed costs; total; variable costs
C) Variable costs; fixed; total costs
D) Total costs; fixed; variable costs
E) Break-even costs; fixed; total costs
Answer: D
Diff: 2 Page Ref: 296
Skill: Concept
Objective: 10-2
27) SRAC is the acronym for which concept related to costs at different levels of production?
A) strategic reasoning and costs
B) short-run accounting costs
C) short-run average cost
D) strategic rights and company
E) strategic revenues and costs
Answer: C
Diff: 2 Page Ref: 296
Skill: Concept
Objective: 10-2
28) The LRAC is most closely related to which of the following?
A) long-term marketing plans
B) long-term business plans
C) the cost of producing a greater quantity of units
D) the cost of promoting a greater quantity of units
E) the legal responsibility of a company
Answer: C
Diff: 2 Page Ref: 296
Skill: Concept
Objective: 10-2
29) The learning curve is also referred to as the ________.
A) LRAC
B) experience curve
C) demand curve
D) break-even curve
E) price elasticity curve
Answer: B
Diff: 1 Page Ref: 297
Skill: Concept
Objective: 10-2
30) As production workers become better organized and more familiar with equipment, the average cost per unit decreases. This is called the ________.
A) demand curve
B) experience curve
C) short-run average cost curve
D) long-run average cost curve
E) marginal utility
Answer: B
Diff: 1 Page Ref: 296-297
Skill: Concept
Objective: 10-2
31) With a higher volume of product, most companies can expect to ________.
A) gain economies of scale
B) become less efficient
C) see fixed costs increase
D) have a straight, horizontal learning curve
E) find competitors using the experience curve strategically
Answer: A
Diff: 2 Page Ref: 296
Skill: Concept
Objective: 10-2
32) The experience curve reveals that ________.
A) repetition in production lowers costs
B) repetition in production enhances efficiency
C) the average cost drops with accumulated production experience
D) A, B, and C
E) none of the above
Answer: D
Diff: 3 Page Ref: 296-297
Skill: Concept
Objective: 10-2
33) When a downward-sloping experience curve exists, a company should usually ________ the selling price of that product in order to bring in higher revenues.
A) increase
B) greatly increase
C) decrease
D) not alter
E) level
Answer: C
Diff: 3 Page Ref: 297
Skill: Concept
Objective: 10-2
34) Which of the following is a risk a company takes when building a strategy around the experience curve?
A) Competitors will likely not be able to meet the company's price cuts.
B) Existing technologies are likely to become more expensive as the company expands.
C) The method does not take competitors' prices into account.
D) The method may cause consumers to become frustrated with changing prices.
E) Aggressive pricing may give the product a cheap image, causing customers to lose interest.
Answer: E
Diff: 2 Page Ref: 297
Skill: Concept
Objective: 10-2
35) A company building its pricing strategy around the experience curve would be most likely to ________.
A) price its products low
B) price its products high
C) engage in break-even pricing
D) avoid cost-based pricing
E) engage in value-added pricing
Answer: A
Diff: 3 Page Ref: 297
Skill: Concept
Objective: 10-2
No comments:
Post a Comment