QUESTION What is bundling? A) This is the practice of pricing two or more products together as a unit. B) This is the strategy in which the cost of producing or buying the product—plus making a profit—is the primary basis for setting price. C) This involves setting a low price to attract many customers and […]
QUESTION The cost of producing or buying the product—plus making a profit—is the primary basis for setting price in this pricing strategy. A) competitive pricing B) target costing C) cost pricing D) price skimming E) penetration pricing ANSWER Answer: C Explanation: C) Some companies favor cost pricing, in which the cost of producing or […]
QUESTION Which kind of pricing is the technique of pricing products or services in odd rather than even amounts to make products seem less expensive? A) discounting B) price skimming C) penetration pricing D) psychological pricing E) bundling ANSWER Answer: D Explanation: D) Psychological pricing, sometimes called odd-even pricing, is the technique of pricing […]
QUESTION Which of the following represents the pricing goal of making a profit? A) aiming for an 18 percent return on investment on the sale of milk B) lowering the price of milk to match the store across the street C) advertising milk as a loss leader to increase market share D) selling milk at […]
QUESTION Which of the following is the best example of psychological pricing? A) The local university charges $16,000 for one student for one year of education. B) Howard has set the price of his luxury RV at $319,000. C) Eugene wants $350.00 for his heavy-duty chainsaw. D) Dominic has set the price of his specialty […]
QUESTION What is the formula for computing the break-even point? A) break-even point = fixed cost / (variable cost of 1 unit – price of 1 unit) B) break-even point = fixed cost / (price of 1 unit – variable cost of 1 unit) C) break-even point = fixed cost / (price of 1 unit […]
QUESTION Which kind of products do the six alternative pricing strategies best apply to? A) convenience B) shopping C) specialty D) unsought E) business ANSWER Answer: B Explanation: B) Shopping goods and services are more expensive products that people buy after comparing for value, price, quality, and style. The six alternative pricing strategies are […]
QUESTION In this kind of pricing, a company starts with the price it wants to charge, figures out the profit margin it wants, then determines what the costs must be to produce the product to meet the desired price and profit goals. A) discounting B) target costing C) bundling D) everyday low pricing E) penetration […]
QUESTION Which alternative pricing strategy works best with unsought products? A) psychological pricing B) bundling C) discounting D) price skimming E) penetration pricing ANSWER Answer: D Explanation: D) Unsought goods and services are those that people have little interest in, are unaware of, or didn’t think they needed. Price skimming is setting a high […]
QUESTION Which of the following is an example of price skimming? A) Gourmet Pizza shop sells special-topping pizzas for $15.99. B) Walmart sells all products at a low price every day. C) When Macy’s introduces new clothing every season, it starts out selling the items at a high price. After a few weeks, the store […]