Chapter 10

Question 1

• …. is customer driven.
• …. is product driven.

Answer 1

• Value-based pricing
• Cost-based pricing

Question 2

…. is offering just the right combination of quality and good service at a fair price.

Answer 2

Good-value pricing

Question 3

…. involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items.

Answer 3

High-low pricing

Question 4

…. attaches value-added features and services to differentiate the companies offers and thus their higher prices.

Answer 4

Value-added pricing

Question 5

…. are the costs that do not vary with production or sales level.

Answer 5

Fixed costs (rent, heat, interest…)

Question 6

…. vary directly with the level of production.

Answer 6

Variable costs (raw materials, packaging…)

Question 7

…. adds a standard markup to the cost of the product.

Answer 7

Cost-plus pricing

Question 8

…. is setting prices based on competitors’ strategies, costs, prices, and market offerings.

Answer 8

Competition-based pricing

Question 9

…. starts with an ideal selling price based on consumer value considerations and then targets costs that will ensure that the price is met.

Answer 9

Target costing

Question 10

Pricing in different types of markets:

Answer 10

• Pure competition
• Monopolistic competition
• Oligopolistic competition
• Pure monopoly