Marketing
Chapter 13
Professor Myles Bassell
page 1
Price
Question Joe Johnson cast his vote for Tom Yancy, a candidate for state representative. Johnson
voted for Yancy because he believed the candidate would represent his interests in the state
legislature. Patty O'Rourke hired an attorney to represent her in a court case involving an auto
accident. The attorney charged O'Rourke a fee for his services. Terry Thomas needed a haircut—
the local stylist charged him $12 for her services. Aaron Mathison mowed his neighbor's lawn; in
exchange, the neighbor roto-tilled Mathison's garden. Johnson's vote, the attorney fees paid by
O'Rourke, the $12 charged by the hair stylist, and exchange of lawn mowing for garden tilling
are examples of:
Answer
price.
barter.
fee setting.
unfair market exchanges.
product fares.
Question On an episode of the television show Friends, Phoebe traded some maternity clothes
for tickets to a Sting concert. This trade was:
Answer
an example of barter because it involved the exchange of
goods.
an example of a countertrade because it took place in the business
market.
an example of a value exchange.
an incentive because it created value where there was none.
an example of nonprice competition.
Question The Society of American Florists (SAF) is an association that provides marketing,
management, accounting, and legal services for the entire floral industry. Members in the forprofit association pay annual dues. Within the last two years, SAF created and is maintaining an
e-marketplace where members with merchandise to sell use the Internet to find members who
need their merchandise. In addition, SAF has created a number of instructional programs that are
free to members. SAF has provided these additional services without raising its annual dues.
SAF's recent strategy is an example of:
Answer
socially responsible pricing.
a value exchange.
value-pricing.
website marketing.
a price/quality exchange.
Marketing
Chapter 13
Professor Myles Bassell
page 2
Price
Question If a company's total annual revenues are $270,000, and its total cost for the same year
was $180,000, then its profit would be $90,000. $270,000 minus $180,000 equals $90,000 is its:
Answer
break-even in dollars.
profit equation.
price elasticity.
break-even in quantity.
marginal analysis.
Question An analysis of a prospective product shows it is expected to grow at least by 10
percent each year over the next 5 years, and then enter the maturity phase of its product life
cycle. This type of analysis would provide useful information in which stage of the price-setting
process?
Answer
identifying pricing constraints and objectives
determining cost, volume, and profit relationships
estimating demand and revenue
select an appropriate (approximate) price lining strategy
make special adjustments to list or quoted price
Question Hallmark was the official supplier of flowers at the Winter Olympics. Each Olympic
winner was being presented with a special bouquet of roses designed to resemble the Olympic
torch. Consumers can buy a smaller version of this same bouquet at the Hallmark website for
$74.95. The arrangement contains two dozen yellow roses. Which of the following may have
been a pricing constraint when setting this price?
Answer
Demand for roses is high in February when the Olympics is
taking place.
As a product category, rose bouquets are in the introduction stage.
Hallmark sells a lot of roses.
All of Hallmark's competitors can sell rose bouquets.
None of the above is an example of a pricing constraint that may have
influenced the price Hallmark charged for its Olympic bouquets.
Marketing
Chapter 13
Professor Myles Bassell
page 3
Price
Question Turkmenistan is a Central Asian country that used to be part of the Soviet Republic.
The only Internet service provider (ISP) in the country is Turkmen Telecom, a governmentoperated facility. Turkmen Telecom is an example of __________ because there is no
competition to determine what pricing strategy it uses.
Answer
pure competition
an oligopololy
oligopolistic competition
monopolistic competition
a pure monopoly
Question If competitive market circumstances are such that there are a lot of sellers who use
some price competition, some product differentiation, and the purpose of advertising is to
differentiate the firm's products from competitors, then __________ must exist in the industry.
Answer
a pure monopoly
an oligopoly
monopolistic competition
pure competition
oligopolistic competition
Question One of the largest and most successful companies in the pharmaceutical industry is
Pfizer. In 2002, Pfizer offered low-income senior citizens many of its most widely used
prescriptions for $15 each a month. This low $15 price was selected in order for Pfizer to achieve
what kind of pricing objective?
Answer
market share
survival
social responsibility
maximizing current profit
none of the above
Question Which of the following would be the BEST example of a fixed cost for a university
bookstore?
Answer
its inventory of principles of marketing texts
overtime for its employees at the beginning of each semester
shoplifting costs
the salary of the bookstore manager
poster board and markers used for making signs