Test Bank CH 10

Question 1

1) ________ refers to the amount of money charged for a product or service.
A) Value
B) Cost
C) Price
D) Wage
E) Salary

Answer 1

C

Question 2

2) ________ is the only element in the marketing mix that produces revenue.
A) Price
B) Product
C) Place
D) Fixed costs
E) Variable costs

Answer 2

A

Question 3

3) Which of the following is true with regard to price?
A) Historically, price has had the least perceptible impact on buyer choice.
B) Price is the least flexible element in the marketing mix.
C) Unlike product features and channel commitments, prices cannot be changed quickly. D) Price is the sum of all the values that customers give up to gain the benefits of having a product.
E) Prices only have an indirect impact on a firm’s bottom line.

Answer 3

D

Question 4

4) Price is important to managers ________.
A) because prices cannot be changed quickly, so must be correctly determined
B) because a small percentage improvement in price can generate a large percentage increase in profitability
C) but other marketing mix elements create customer value and build relationships
D) but product features can be changed more quickly
E) but has little impact on a firm’s market share

Answer 4

B

Question 5

5) Prices have a direct impact on a firm’s bottom line.

Answer 5

TRUE

Question 6

6) Price is the most inflexible of the marketing mix elements.

Answer 6

FALSE

Question 7

10) What sets the ceiling for product prices?
A) product manufacturing costs
B) sellers’ perceptions of the product’s value
C) customer perceptions of the product’s value
D) variable costs
E) break-even volume

Answer 7

C

Question 8

11) What sets the floor for product prices?
A) consumer perceptions of the product’s value
B) product costs
C) competitors’ strategies
D) advertising budgets
E) market competition

Answer 8

B

Question 9

12) Effective ________ pricing involves understanding how much value consumers place on the benefits they receive from the product and setting a price that captures that value.
A) competition-oriented
B) cost-based
C) time-based
D) customer-oriented
E) marketer-oriented

Answer 9

D

Question 10

13) ________ pricing uses buyers’ perceptions of value as the key to pricing.
A) Customer value-based
B) Cost-based
C) Time-based
D) Markup
E) Target return

Answer 10

A

Question 11

14) Factors a company considers in setting its price include all of the following EXCEPT .________
A) competitors’ strategies and prices
B) product costs
C) overall marketing strategy and mix
D) value of the product on the pre-owned market E) nature of the market and demand

Answer 11

D

Question 12

15) Which of the following is true of value-based pricing?
A) The targeted value and price drive decisions about what costs can be incurred and the resulting product design.
B) Value-based pricing is mostly product driven.
C) Value-based pricing involves setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for its effort and risk.
D) The marketer usually designs a product and marketing program and then sets the price.
E) A company using value-based pricing designs what it considers to be a good product, adds up the costs of making the product, and sets a price that covers costs plus a target profit.

Answer 12

A

Question 13

16) What is usually the first step in cost-based pricing?
A) testing the product concept with potential customers
B) determining the marketing mix strategy
C) setting a price that covers costs plus a target profit
D) designing a good product
E) adding up the costs of making the product

Answer 13

D

Question 14

17) Which of the following processes does value-based pricing reverse?
A) high-low pricing
B) everyday low pricing
C) cost-based pricing
D) good-value pricing
E) value-added pricing

Answer 14

C

Question 15

18) A pharmaceutical company in Utah recently released a new and expensive anti-ulcer drug in the market. The company justifies the high price of the drug by claiming that it is highly effective for treating all kinds of ulcers. The company also claims that the new drug will help bring down the need for invasive surgeries, an additional benefit for patients. Which of the following pricing strategies is the pharmaceutical company most likely using in this instance?
A) target pricing
B) markup pricing
C) cost-based pricing
D) value-based pricing
E) break-even pricing

Answer 15

D

Question 16

19) A restaurant wants to use value-based pricing. It knows the costs of the ingredients in the food. It must also factor in ________ in determining customer satisfaction and value.
A) wages of employees
B) costs of utilities of the restaurant
C) atmosphere and décor of the restaurant
D) travel distance for customers
E) percentage of bar patrons versus dining patrons

Answer 16

C

Question 17

21) Underpriced products ________.
A) produce less revenue than they would if they were priced at the level of perceived value
B) sell poorly in the global marketplace
C) produce more revenue than they would if they were priced at the level of perceived value
D) mostly offer higher value than those with a high markup price
E) are characterized by rapidly declining demand

Answer 17

A

Question 18

22) The Great Recession of 2008 to 2009 triggered a shift in consumer attitudes toward .________
A) variety and price
B) perceptions of value
C) locations of stores
D) price and quality
E) economic data

Answer 18

D

Question 19

23) Which of the following involves introducing less-expensive versions of established, brand name products?
A) markup pricing
B) good-value pricing
C) time-based pricing
D) cost-based pricing
E) target profit pricing

Answer 19

B

Question 20

24) ________ pricing refers to offering just the right combination of quality and gratifying service at a fair price.
A) Markup
B) Good-value
C) Cost-plus
D) Target profit
E) Break-even

Answer 20

B

Question 21

25) When McDonald’s and other fast food restaurants offer “value menu” items at surprisingly low prices, they are most likely using ________ pricing.
A) break-even
B) target profit
C) good-value
D) cost-plus
E) target return

Answer 21

C

Question 22

26) Azure Air, an airline company, offers attractive prices to customers with tighter budgets. A no-frills airline, it charges for all other additional services, such as baggage handling and in- flight refreshments. Which of the following best describes Azure Air’s pricing method?
A) target profit pricing
B) good-value pricing
C) cost-based pricing
D) break-even pricing
E) penetration pricing

Answer 22

B

Question 23

27) Retailers such as Costco and Walmart charge a constant, daily low price with few or no temporary price discounts. This is an example of ________ pricing.
A) competition-based
B) everyday low
C) cost-plus
D) break-even
E) penetration

Answer 23

B

Question 24

28) Bon Vivant offers an assortment of exclusive French wines at incredibly low prices. These prices are neither limited-time offers nor special discounts, but represent the daily prices of products sold by Bon Vivant. This reflects Bon Vivant’s ________ pricing strategy.
A) everyday low
B) markup
C) penetration
D) break-even
E) cost-based

Answer 24

A

Question 25

29) ________ pricing involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items.
A) High-low
B) Everyday low
C) Cost-plus
D) Break-even
E) Penetration

Answer 25

A

Question 26

30) Department stores such as Kohl’s and JCPenney’s practice high-low pricing by ________.
A) charging a constant, everyday low price
B) providing few or no temporary price discounts
C) increasing prices temporarily on select products
D) having frequent sale days for store credit-card holders
E) underpricing most consumer items

Answer 26

D

Question 27

31) Companies that adopt value-added pricing ________.
A) consider value-added features as a fitting substitute for aggressive cost cutting
B) set incredibly low prices to meet competition
C) attach value-added features and services to differentiate their offers and support their higher
prices
D) overprice their products without any apparent justification
E) underprice their products and lower quality to boost demand in the short-run

Answer 27

C

Question 28

32) Which of the following is true with regard to value-added pricing?
A) Companies that practice value-added pricing typically match the competition by cutting prices.
B) Companies practicing value-added pricing differentiate their offers by attaching value-added features to offerings that, in turn, justify higher prices.
C) The intrinsic value of products sold by companies practicing value-added pricing is far less than their actual selling price.
D) Companies practicing value-added pricing primarily rely on cost differentiation.
E) Value-added pricing is the most suitable pricing strategy in pure monopolies.

Answer 28

B

Question 29

33) In an effort to differentiate its offerings from its competitors, Pegasus Computers decided to add an extra USB port in all its laptops besides providing a free pair of Delphi power bass headphones with every Pegasus laptop. Although the additional features increased the price of the laptops by $500, Pegasus was confident that the strategy would help boost demand for its laptops substantially. This is an example of ________.
A) good-value pricing
B) markup pricing
C) break-even pricing
D) value-added pricing
E) cost-based pricing

Answer 29

D

Question 30

34) ________ involves setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk.
A) Value-based pricing
B) Competition-based pricing
C) Cost-based pricing
D) Penetration pricing
E) Break-even pricing

Answer 30

C

Question 31

35) Companies with lower costs ________.
A) specialize in selling products with value-added features
B) usually market products with inferior quality, thereby justifying the low selling price C) can set lower prices that result in smaller margins but greater sales and profits
D) tend to overprice products owing to their monopolistic advantage
E) usually set higher prices that result in higher margins

Answer 31

C

Question 32

36) Companies with higher costs ________.
A) can drive out competitors through their pricing strategy
B) intentionally pay higher costs so that they can add value through higher quality and claim higher prices and margins
C) can set lower prices that result in increased sales though with lower margins
D) specialize in selling products without value-added features
E) are more financially successful

Answer 32

B

Question 33

37) A company must pay each month’s bills for rent, heat, interest, and executive salaries regardless of the company’s level of output. This exemplifies its ________ costs.
A) overhead
B) variable
C) target
D) total
E) unit

Answer 33

A

Question 34

38) Overhead costs ________ as the number of units produced increases.
A) decrease
B) increase steadily
C) fluctuate
D) remain the same
E) increase rapidly

Answer 34

D

Question 35

39) Which of the following is most likely a fixed cost?
A) sales representative commissions
B) product distribution costs
C) manufacturing input costs
D) temporary worker salaries
E) facility rental payments

Answer 35

E

Question 36

39) Which of the following is most likely a fixed cost?
A) sales representative commissions
B) product distribution costs
C) manufacturing input costs
D) temporary worker salaries
E) facility rental payments

Answer 36

E

Question 37

40) Fixed costs ________.
A) are costs that do not vary with production or sales level
B) vary directly with the level of production
C) decrease with accumulated production experience
D) are the sum of the overhead and variable costs for any given level of production
E) represent the annual costs of inputs incurred by a company

Answer 37

A

Question 38

41) Costs that change with the level of production are referred to as ________.
A) fixed costs
B) variable costs
C) target costs
D) total costs
E) overhead costs

Answer 38

B

Question 39

42) In 2011, the fixed costs of a company were $500,000, and its variable costs equaled $150,000. In 2010, the company made an annual profit of $200,000. It has been predicted that, despite a steady growth, the company’s variable costs will likely equal $300,000 by 2013. The total costs of the company in 2011 were ________.
A) $350,000
B) $450,000
C) $650,000
D) $800,000
E) $950,000

Answer 39

C

Question 40

43) The total production costs at Kellner Machine Works are $87,000 out of which $45,000 represent fixed costs. Which of the following is representative of the variable costs incurred by the company?
A) $35,000
B) $42,000
C) $45,000
D) $87,000
E) $132,000

Answer 40

B

Question 41

44) The fixed cost in manufacturing a single LED monitor is $40 and the variable cost is $12. If the company expects to manufacture 5,000 monitors, the total costs would be ________.
A) $60,000
B) $200,000
C) $260,000
D) $420,000
E) $500,000

Answer 41

C

Question 42

45) As production moves up, the average cost per unit decreases because ________.
A) variable costs decrease
B) of increasing diseconomies of scale
C) fixed costs are spread over more units
D) overhead costs decrease
E) revenue increases

Answer 42

C

Question 43

46) A cell phone manufacturing firm produced 1,000 cell phones a day but believed that it could reasonably step up production to 2,000 cell phones a day. Consequently, it built a larger plant and installed efficient machinery and work arrangements to realize the projected output. Which of the following can most likely be inferred from this information?
A) The unit cost of producing 2,000 cell phones per day would be twice that of the unit cost of producing 1,000 units per day.
B) A production plant with the capacity of producing 5,000 cell phones a day would be most efficient.
C) The unit cost of producing 2,000 cell phones per day would be lower than the unit cost of producing 1,000 units per day.
D) A 2,000-capacity production plant would be less efficient because of increasing diseconomies of scale.
E) The fixed costs of the firm are more likely to increase with the increase in output.

Answer 43

C

Question 44

48) A manufacturing plant is designed to produce 2000 flat-screen TVs per day. But demand is higher than that. If the company tries to increase its production to 2500 TVs per day, the average costs will ________ because ________.
A) decrease; the plant becomes more efficient
B) stay the same; the plant becomes more efficient C) decrease; the plant becomes inefficient
D) increase; the plant becomes more efficient
E) increase; the plant becomes inefficient

Answer 44

E

Question 45

49) The learning curve is representative of the ________.
A) per unit cost of output in the long run
B) drop in the average per-unit production cost that comes with accumulated production experience
C) number of units the market will buy in a given time period, at different prices that might be charged
D) total market demand resulting from different prices
E) per unit cost of output in the short run

Answer 45

B

Question 46

50) As production workers become better organized and more familiar with equipment, the average cost per unit tends to decrease with the ________.
A) increase in the diseconomies of scale
B) accumulated production experience
C) decrease in the economies of scale
D) increase in derived demand
E) increase in primary demand

Answer 46

B

Question 47

51) With accumulated production experience and a higher volume of production, companies not only become more efficient but also ________.
A) gain economies of scale
B) incur higher overhead costs
C) create derived demand in the market
D) spend more per unit of produced output
E) tend to routinely spend less on inputs

Answer 47

A

Question 48

52) The experience curve reveals that ________.
A) repetition in production has no visible impact on production costs
B) repetition in production enhances efficiency
C) the average cost of production remains the same with accumulated production experience
D) repetition in production adds to the costs and thereby increases the prices of outputs
E) the average cost of production increases with accumulated production experience

Answer 48

B

Question 49


53) A downward-sloping experience curve is indicative of ________.
A) the negative customer perception about a company’s products
B) the falling demand for a company’s products
C) the falling unit production cost of a company
D) the low quality of a company’s products
E) slow and inadequate organizational learning

Answer 49

C

Question 50

54) To take advantage of a downward-sloping experience curve, a company must do all of the following EXCEPT ________.
A) increase the product’s price
B) be able to sell the higher volume of product
C) price its product lower
D) increase its production output
E) decrease its costs through experience gained

Answer 50

A

Question 51

55) Which of the following is most likely a risk associated with experience-curve pricing? A) High-volume production facilities are unable to meet demand.
B) New technology often leads to productivity problems.
C) Demand for the product fluctuates unpredictably.
D) Consumers tend to prefer new brands over established ones.
E) Aggressive pricing often gives a product a cheap image.

Answer 51

E

Question 52

57) The simplest pricing method is ________ pricing. A) value-based
B) fixed cost
C) cost-plus
D) target return
E) competition-based

Answer 52

C

Question 53

58) Cost-plus pricing ________.
A) is a complex pricing method
B) involves pricing that accurately reflects production costs
C) involves adding a standard markup for profit
D) aims at breaking even on the costs of making and marketing a product
E) is a value-based pricing method

Answer 53

C

Question 54

59) Lawyers, accountants, and other professionals typically price by adding a standard markup for profit. This exemplifies ________.
A) target pricing
B) cost-plus pricing
C) value-based pricing
D) break-even pricing
E) penetration pricing

Answer 54

B

Question 55

61) Samsung Mobile plans to launch a new phone with a unit cost of $270 and wants to earn a 10 percent markup on its sales. Samsung’s markup price is ________.
A) $275
B) $280
C) $295
D) $300
E) $335

Answer 55

D

Question 56

62) Why is markup pricing most likely impractical?
A) Calculating costs is complicated due to fluctuations.
B) By tying the price to cost, sellers oversimplify pricing.
C) When all firms in the industry use this pricing method, prices tend to be similar.
D) The method ignores demand and competitor prices.
E) With a standard markup, consumers know when they are being overcharged.

Answer 56

D

Question 57

63) Why is markup pricing most likely popular?
A) Sellers are more certain about demand than about costs
B) Markup pricing tends to maximize market competition.
C) Markup pricing affords buyers greater bargaining power.
D) Sellers do not need to make frequent adjustments as demand changes
E) Markup pricing is designed to set prices to break even on the costs of making and marketing a product.

Answer 57

D

Question 58

65) Target return pricing is a variation of which of the following cost-oriented pricing approaches?
A) cost-plus pricing
B) break-even pricing
C) markup pricing
D) value-based pricing
E) fixed cost pricing

Answer 58

B

Question 59

66) Target return pricing uses the concept of a(n) ________, which shows the total cost and total revenue expected at different sales volume levels.
A) BCG matrix
B) break-even chart
C) SWOT analysis
D) demand curve
E) experience curve

Answer 59

B

Question 60

67) John assured his venture capitalists an earning of 25-percent return on equity when he began his IT startup. In order to achieve this result, he will most likely use which of the following pricing approaches?
A) value-based pricing
B) markup pricing
C) EDLP
D) customer-based pricing
E) target return pricing

Answer 60

E

Question 61

68) The break-even volume is the point at which________.
A) the total revenue and total cost curves intersect
C) the production of one more unit will not lead to increase in demand
B) demand equals supply
D) the company can pay off all its long-term debt
E) a firm exceeds the sales forecast

Answer 61

A

Question 62

69) Which of the following statements about break-even analysis is true?
A) It is used to determine how much production experience a company must have in order to achieve desired efficiencies.
B) It is a technique used to calculate fixed costs.
C) It determines the amount of retained earnings a company will have during a given accounting period.
D) It is a technique marketers use to determine the relationship between supply and demand.
E) It is calculated by using variable costs, the unit price, and fixed costs.

Answer 62

E

Question 63

70) A company faces fixed costs of $100,000 and variable costs of $8 per unit. It plans to directly sell its product in the market for $12. How many units must it produce and sell to break even?
A) 20,000
B) 25,000
C) 30,000
D) 35,000
E) 40,000

Answer 63

B

Question 64

71) As a manufacturer increases the price, ________. A) efficiency drops
B) the break-even volume drops
C) competition is minimized
D) the total costs increase
E) the profit margin shrinks

Answer 64

B

Question 65

72) Mansfield Pharmaceuticals markets Zipro, an antibiotic. The firm has fixed costs of $1,000,000 and variable costs of $2 per bottle of 50 tablets priced at $10 per bottle. What is the break-even volume?
A) 25,000
B) 55,000
C) 100,000
D) 115,000
E) 125,000

Answer 65

E

Question 66

73) A manufacturer has fixed costs of $100,000, a variable cost of $10 per unit of output, and break-even volume of 50,000 units. What should the manufacturer’s unit cost be in order to break even?
A) $10
B) $12
C) $14
D) $16
E) $20

Answer 66

B

Question 67

75) Which of the following involves setting prices based on a rival firm’s strategies, costs, prices, and market offerings?
A) target return pricing
B) good-value pricing
C) competitor value-added pricing
D) market-based pricing
E) competition-based pricing

Answer 67

E

Question 68

76) Companies can legitimately charge a higher price if ________.
A) consumers perceive that the company’s product offers greater value
B) the demand for products manufactured by a firm is highly elastic
C) the cost of advertising is minimal
D) derived demand remains constant
E) consumers de-emphasize quality

Answer 68

A

Question 69

110) Which of the following is an external factor that affects pricing decisions in a company?
A) the company’s overall marketing strategy
B) the nature of the market
C) the organizational objectives of the company
D) elements of the company’s marketing mix
E) the annual advertising budget of rival firms

Answer 69

B

Question 70

111) Which of the following is an internal factor that affects pricing decisions in a company?
A) the nature of the market
B) the degree of inflation in the economy
C) the overall marketing strategy of the company D) the forces of demand and supply in the market E) consumers’ perception of value

Answer 70

C

Question 71

113) Developing an effective integrated marketing mix program involves coordinating price decisions with product design, promotion, and ________ decisions.
A) distribution
B) production
C) assembly
D) warranty
E) competition

Answer 71

A

Question 72

114) Elmo Inc., a global conglomerate, designed the ElBrush, an electric toothbrush. Sensing market demand for the electric toothbrush, Elmo started with an ideal selling price of $13 based on customer value considerations and then targeted costs to ensure that the price was met. This exemplifies ________.
A) competition-based pricing
B) cost-plus pricing
C) target costing
D) everyday low pricing
E) high-low pricing

Answer 72

C

Question 73

115) PoolPak produces climate-control systems for large swimming pools. The company’s customers are more concerned about service support for maintaining their systems than the initial price of the product. PoolPak specializes in and differentiates itself through both cutting- edge technologies used to build its high-value climate control systems as well as seamless quality service. PoolPak’s prices are very high, but demand for its climate-control systems seems to be forever on the rise. This exemplifies ________.
A) target costing
B) a pure monopoly
C) cost-plus pricing
D) a nonprice position
E) break-even pricing

Answer 73

D

Question 74

117) A decision to position the product on high-performance quality will mean that the .________
A) seller must charge a higher price to cover higher costs
B) seller must charge a lower price to attract more customers
C) producer must step down production
D) marketer must boost derived demand in the market
E) break-even volume will be fairly low

Answer 74

A

Question 75

118) Price setting is usually determined by ________ in small companies.
A) the top managers
B) the marketing department
C) the sales department
D) divisional managers
E) product managers

Answer 75

A

Question 76

119) Price setting is usually determined by ________ in large companies.
A) top managers
B) external stakeholders
C) product managers
D) non-executive employees
E) the sales department

Answer 76

C

Question 77

120) In industrial markets, ________ typically has the final say in setting the pricing objectives and policies of a company.
A) the sales manager
B) top management
C) the production manager
D) the HR department
E) the sales staff

Answer 77

B

Question 78

123) Under ________, the market consists of many buyers and sellers trading in a uniform commodity.
A) pure competition
B) monopolistic competition
C) oligopolistic competition
D) a pure monopoly
E) the dominant firm model

Answer 78

A

Question 79

124) Which of the following exemplifies a pure competitive market?
A) a market where many buyers and sellers trade over a range of prices rather than a single market price
B) a market where a single firm controls the larger fraction of the market share
C) a market where a few powerful firms control the larger fraction of the market share
D) a market characterized by only a few large sellers
E) a market where many buyers and sellers trade in a uniform commodity

Answer 79

E

Question 80

125) Which of the following is true of a pure competitive market?
A) A single seller has a major effect on the current and future market price.
B) Companies spend significantly on marketing research and product development.
C) The advertising budget of companies is usually huge.
D) Sellers try to develop differentiated offers for different customer segments.
E) Sellers spend little time on marketing strategy

Answer 80

E

Question 81

126) In Viña del Mar, Chile, a large number of shops specialize in selling the same quality of seafood products along the beach frequented by tourists. No individual shop dares charge more than the going price without fearing loss of business to other shops. This exemplifies .________
A) pure competition
B) monopolistic competition
C) oligopolistic competition
D) pure monopoly
E) the dominant firm model

Answer 81

A

Question 82

127) Under ________, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price.
A) pure competition
B) monopolistic competition
C) oligopolistic competition
D) a pure monopoly
E) the dominant firm model

Answer 82

B

Question 83

128) Which of the following is true with regard to pure competition?
A) Under pure competition, no single buyer or seller has much effect on the going market price. B) In a purely competitive market, marketing research is of utmost importance.
C) In a purely competitive market, product development is the focus of most firms.
D) Under pure competition, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price.
E) Under pure competition, the market consists of only a few large sellers.

Answer 83

A

Question 84

129) Which of the following is true with regard to monopolistic competition?
A) Under monopolistic competition, the market consists of many buyers and sellers who trade at a single market price.
B) Under monopolistic competition, the market consists of only a few large sellers.
C) In a monopolistic market, little time is spent on marketing strategy.
D) Sellers can differentiate their products to buyers.
E) In a monopolistic market, price becomes a major competitive tool.

Answer 84

D

Question 85

130) The movie industry in a country is controlled by six large studios that receive 90 percent of the annual revenues from movies. This is an example of a(n) ________.
A) pure competition
B) monopolistic competition
C) oligopolistic competition
D) pure monopoly
E) government monopoly

Answer 85

C

Question 86

131) In which situation is the market dominated by one seller?
A) pure monopoly
B) monopolistic competition
C) oligopolistic competition
D) pure competition
E) free market

Answer 86

A

Question 87

132) Under oligopolistic competition ________.
A) the market consists of a single dominant seller
B) the market consists of numerous small sellers
C) the market consists of many buyers and sellers who trade over a range of prices rather than a single market price
D) sellers are typically unresponsive to competitors’ pricing strategies and marketing moves
E) the market consists of only a few large sellers

Answer 87

E

Question 88

135) Bruno Servers has decided to decrease its prices on its popular higher-range servers. The company can reasonably expect ________ to increase.
A) fixed costs
B) variable costs
C) demand
D) additional value
E) overhead costs

Answer 88

C

Question 89

137) If demand hardly changes with a small change in price, the demand is ________.
A) variable
B) inelastic
C) highly elastic
D) derived
E) negative

Answer 89

B

Question 90

138) If demand changes greatly with a small change in price, the demand is ________.
A) variable
B) inelastic
C) derived
D) elastic
E) negative

Answer 90

D

Question 91

139) Dips in the economy and the instant price comparisons made possible by the Internet have contributed to ________.
A) decreased consumer price sensitivity
B) increased consumer price sensitivity
C) a less direct relationship between supply and demand
D) low brand equity for luxury goods
E) decreased brand loyalty

Answer 91

B

Question 92

140) In the aftermath of the Great Recession of 2008 to 2009, consumers ________.
A) have become more value conscious
B) have become less value conscious
C) exhibit great interest in prestige pricing
D) show no interest in price cutting
E) rarely endorse value-for-money deals

Answer 92

A

Question 93

142) When companies set prices, the government and social concerns are ________ factors affecting pricing decisions.
A) external
B) internal
C) economic
D) cultural
E) organizational

Answer 93

A