Marketing 3023 - Marketing Fundamentals » Winter 2021 » Quiz 7

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Question #1
A main purpose of unfair trade practice legislation is to
A.   prevent manufacturers from taking high markups.
B.   require some minimum percentage markup on cost.
C.   permit different types of retail outlets to charge different retail prices.
D.   eliminate price competition on manufacturers' brands.
E.   guarantee retailers some profit.
Question #2
A business products producer that has given its salespeople the right to adjust prices when necessary to get new business is using a ________ policy.
A.   target-return pricing
B.   skimming price
C.   flexible-price
D.   penetration pricing
E.   one-price
Question #3
Offering the same price to all customers who purchase products under essentially the same conditions and in the same quantities is a ________ policy.
A.     
B.   one-price
C.   penetration pricing
D.   flexible-price
E.   value pricing
F.   skimming price
Question #4
If a manufacturer in China offers a product in the U.S. market at a lower price than in China, this may be a violation of a(n)
A.   monopoly law.
B.   price discrimination law.
C.   truth-in-advertising law.
D.   price-fixing law.
E.   antidumping law.
Question #5
Price fixing is illegal under all circumstances in the United States.
A.   TRUE
B.   FALSE
Question #6
Noncumulative quantity discounts
A.   tie a buyer to the seller after a single purchase.
B.   reduce the customer's cost for additional purchases.
C.   are never attractive to buyers.
D.   are designed to primarily encourage repeat buying.
E.   apply only to individual orders.
Question #7
Price fixing is not illegal unless it hurts a competitor.
A.   TRUE
B.   FALSE
Question #8
The price paid by students to colleges is called tuition.
A.   FALSE
B.   TRUE
Question #9
In mature markets, there is downward pressure on both prices and profit margins. In this situation, retailers often have to set prices to meet the competition.
A.   TRUE
B.   FALSE
Question #10
Pricing a product sold in a foreign market lower than the cost of producing it is called dumping.
A.   TRUE
B.   FALSE
Question #11
You are considering opening a fast-food store. Your fixed costs for the required land, building, parking lot paving, kitchen equipment, and neon sign will be $1,000,000. The variable cost will be $1.89 for servings, which will sell for $2.89. How many servings must you sell to break even?
A.   1,000,000
B.   1,200,000
C.   2,890,000
D.   This cannot be determined with the information provided.
E.   189,000
Question #12
Prestige pricing involves setting a rather high price because the product has a normal down-sloping demand curve.
A.   FALSE
B.   TRUE
Question #13
Online auctions (on the Internet) are becoming very popular as a way to determine how much customers are willing to pay for a product.
A.   TRUE
B.   FALSE
Question #14
A markup is the dollar amount added to the cost of products to get the selling price.
A.   FALSE
B.   TRUE
Question #15
A firm's total cost increases only when its variable cost increases.
A.   FALSE
B.   TRUE
Question #16
Which of the following would not be included in a producer's total fixed cost?
A.   rent
B.   depreciation
C.   component parts
D.   property taxes
E.   insurance
Question #17
Marginal analysis
A.   can help find the price that results in the greatest difference between total revenue and total cost.
B.   focuses on the last unit that will be sold.
C.   can be used to find the most profitable price and quantity, can help find the price that results in the greatest difference between total revenue and total cost, can be very useful if a firm's pricing objective is profit maximization and focuses on the last unit that will be sold.
D.   can be used to find the most profitable price and quantity. And focuses on the last unit that will be sold.
E.   can be very useful if a firm's pricing objective is profit maximization.
F.   All of the answers are correct.
Question #18
When Best Buy advertises one price for the cost of a computer and a monitor, it is using
A.   flexible pricing.
B.   bait pricing.
C.   a one-price policy.
D.   product-bundle pricing.
E.   complementary product pricing.
Question #19
Which of the following is true of the markup used by different firms in the same line of business?
A.   They are likely to use the same markup percentage only if they are in pure competition.
B.   They are likely to use the same markup percentage, because this is what is acceptable to manufacturers.
C.   They are likely to use the same markup percentage, because they all want to have the same selling price.
D.   They are likely to use the same markup percentage, because they are likely to have similar operating expenses.
E.   They are likely to use the same markup percentage, because this is a government requirement.
Question #20
The break-even point is the intersection of the total cost curve and the total profit curve.
A.   FALSE
B.   TRUE

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