Question 1

Customers that sell small-ticket items frequently offer their customers:

Accepted Answer

A)  discounts.
B)  installment credit option.
C)  "store value" cards.
D)  trade credit.E) A) and D)
F) A) and C)

Question 2

For a service firm,labor and materials comprise the largest portion of the cost of the service provided.

Accepted Answer

A) True 
 B)False

Question 3

Because installment credit is so profitable for the small business,most small businesses finance themselves.

Accepted Answer

A) True 
 B)False  False

Question 4

Three objectives of new product pricing are:

Accepted Answer

A)  get the product accepted,maintain market share as competition grows,and earn a profit.
B)  get the product accepted,avoid price wars,and earn a profit
C)  maintain market share as competition grows,earn profits,and increase sales
D)  None of the aboveE) A) and D)
F) None of the above

Question 5

Price lining,leader pricing,and odd pricing are three geographic pricing strategies that can be used for established products.

Accepted Answer

A) True 
 B)False

Question 6

The use of credit cards increases the probability,speed,and magnitude of customer spending.

Accepted Answer

A) True 
 B)False

Question 7

Which price strategy is mostly used for moving stale,outdated,damaged merchandise?

Accepted Answer

A)  Markdown pricing
B)  Multiple pricing
C)  Bundling
D)  SkimmingE) C) and D)
F) B) and C)

Question 8

Even though cost-plus pricing is simple,it does not encourage a small business to use its resources efficiently.

Accepted Answer

A) True 
 B)False

Question 9

When a retailer routinely prices goods at $9.97 and $7.36 rather than $10.00 and $7.50,the retailer is using:

Accepted Answer

A)  variable pricing.
B)  penetration pricing.
C)  odd pricing.
D)  price skimming.E) A) and B)
F) A) and C)

Question 10

The costs of merchandise used in computing markup include wholesale price,incidental costs,and profit minus any discounts.

Accepted Answer

A) True 
 B)False  True

Question 11

Price is a measure of what the customer must exchange to obtain goods and services and is an indicator of value to the customer.

Accepted Answer

A) True 
 B)False

Question 12

A skimming pricing strategy sets a relatively high price for a product to appeal to the segment of the market which is not sensitive to price.

Accepted Answer

A) True 
 B)False

Question 13

________ pricing is when the base product is not functional without the appropriate accessory.

Accepted Answer

A)  Captive-product
B)  Optional-product
C)  By-product
D)  None of the aboveE) C) and D)
F) B) and D)

Question 14

________ is grouping together several products or services,or both,into a package that offers customers extra value at a special price.

Accepted Answer

A)  Leader pricing
B)  Price lining
C)  Discount pricing
D)  BundlingE) A) and B)
F) A) and C)

Question 15

The prices a small business charges influence its image in the marketplace.

Accepted Answer

A) True 
 B)False

Question 16

The skimming pricing strategy is used when there is a lot of competition in the market.

Accepted Answer

A) True 
 B)False

Question 17

Before deciding to use credit as a competitive weapon,small business owners must make sure that the firm's cash position is strong enough to support additional pressure.

Accepted Answer

A) True 
 B)False

Question 18

The most commonly used pricing technique for manufacturers is:

Accepted Answer

A)  direct pricing.
B)  margin pricing.
C)  cost-plus.
D)  absorption pricing.E) A) and B)
F) B) and D)

Question 19

Baseball cards usually sell for 10 cents each.The Card Shop advertises them at "12 for $1.00." This is:

Accepted Answer

A)  price lining.
B)  leader pricing.
C)  odd pricing.
D)  multiple unit pricing.E) B) and C)
F) A) and D) D

Question 20

Price ________ usually begin when one competitor believes that they can achieve a higher volume through lower price,or they believe that they can exert enough pressure on other competitors' profits to drive them out of business.

Accepted Answer

A)  discounts
B)  markdowns
C)  war
D)  penetrationE) A) and D)
F) B) and C)

Exam 11: Pricing and Credit Strategies

Customers that sell small-ticket items frequently offer their customers:

Correct AnswerverifiedShow Answer

For a service firm,labor and materials comprise the largest portion of the cost of the service provided.

Correct AnswerverifiedShow Answer

Because installment credit is so profitable for the small business,most small businesses finance themselves.

Correct AnswerverifiedFalse

Three objectives of new product pricing are:

Correct AnswerverifiedShow Answer

Price lining,leader pricing,and odd pricing are three geographic pricing strategies that can be used for established products.

Correct AnswerverifiedShow Answer

The use of credit cards increases the probability,speed,and magnitude of customer spending.

Correct AnswerverifiedShow Answer

Which price strategy is mostly used for moving stale,outdated,damaged merchandise?

Correct AnswerverifiedShow Answer

Even though cost-plus pricing is simple,it does not encourage a small business to use its resources efficiently.

Correct AnswerverifiedShow Answer

When a retailer routinely prices goods at $9.97 and $7.36 rather than $10.00 and $7.50,the retailer is using:

Correct AnswerverifiedShow Answer

The costs of merchandise used in computing markup include wholesale price,incidental costs,and profit minus any discounts.

Correct AnswerverifiedTrue

Price is a measure of what the customer must exchange to obtain goods and services and is an indicator of value to the customer.

Correct AnswerverifiedShow Answer

A skimming pricing strategy sets a relatively high price for a product to appeal to the segment of the market which is not sensitive to price.

Correct AnswerverifiedShow Answer

________ pricing is when the base product is not functional without the appropriate accessory.

Correct AnswerverifiedShow Answer

________ is grouping together several products or services,or both,into a package that offers customers extra value at a special price.

Correct AnswerverifiedShow Answer

The prices a small business charges influence its image in the marketplace.

Correct AnswerverifiedShow Answer

The skimming pricing strategy is used when there is a lot of competition in the market.

Correct AnswerverifiedShow Answer

Before deciding to use credit as a competitive weapon,small business owners must make sure that the firm's cash position is strong enough to support additional pressure.

Correct AnswerverifiedShow Answer

The most commonly used pricing technique for manufacturers is:

Correct AnswerverifiedShow Answer

Baseball cards usually sell for 10 cents each.The Card Shop advertises them at "12 for $1.00." This is:

Correct AnswerverifiedD

Price ________ usually begin when one competitor believes that they can achieve a higher volume through lower price,or they believe that they can exert enough pressure on other competitors' profits to drive them out of business.

Correct AnswerverifiedShow Answer

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False

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True

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D

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