1. What is an external factor that affects the price that a business charges for its products?
A. Operating costs
B. Variable expenses
C. Economic conditions
D. Employee benefits
2. What is an example of an unethical pricing practice?
A. A company prices its products low in an attempt to drive its competitors out of business.
B. A business increases its prices when the cost of the materials to make the products increases.
C. A firm sets a business objective to increase its profit margins over the next five years.
D. A business prices a new product line to reflect high quality and status.
3. Why do some new companies set their selling prices as low as they can?
A. To eliminate all possible competition
B. To get market share as fast as possible
C. To earn a high return on investment
D. To quickly make a large profit
4. What would be the most appropriate pricing strategy for a business in a small town where
unemployment
has skyrocketed and the economy is in a downturn?
A. Below-cost pricing
B. High-level pricing
C. Odd-cents pricing
D. Flexible pricing
5. What might happen if a business's customers feel that they are not getting the most value for their
money?
A. Sales remain the same.
B. Sales increase.
C. Customers spend money elsewhere.
D. Customers purchase more.
6. Which of the following factors should businesses consider when establishing a product's selling price:
A. Economic conditions
B. Unfair sales laws
C. Pricing agreements
D. Trade practices
7. Which of the following is an example of an ethical issue as it relates to predatory pricing:
A. An international book publisher sells similar products to similar customers at different prices.
B. A tire producer introduces a new item to its product line and sets the initial price very low.
C. A salesperson encourages a customer to purchase an extended vehicle warranty for a new car.
D. A local ice-cream shop prices menu items below cost in an effort to eliminate its competition.
8. What is the advantage to a business of using bar-code pricing?
A. Easier for customers to read
B. Reduces required business security
C. Easier to change prices
D. Reduces number of employees needed for sales
9. Companies A, B, and C sell similar products. Together, they recently decided to sell their products for
the
same price. In what unethical activity are the businesses engaging?
A. Bait-and-switch
B. Price fixing
C. Loss-leader pricing
D. Gray markets
10. Technology allows manufacturers to pre-print product packaging with Universal Product Codes
(UPCs)
which contain __________ information.
A. pricing
B. sampling
C. operating
D. selling
11. A business charges a small company a higher price for a product than it charges a large company for
the
same product. What does this represent?
A. Price discrimination
B. Controlled pricing
C. Price competition
D. Regulated pricing
12. How does technology help businesses when it enables them to obtain and analyze vast amounts of
information that impact the pricing function?
A. By generating profit-and-loss statements
B. By deciding how much to spend on advertising
C. By calculating the cost of hiring more employees
D. By determining the best time to adjust prices
13. What costs do businesses usually include in the price of their products?
A. Regulations
B. Inflation
C. Transportation
D. Orientation
14. The Standard Oil Company's price-fixing tactics and monopolistic control over oil refining and
distribution
in the late 1800's was a major contributing factor in the enactment of which piece of legislation?
A. Sherman Antitrust Act
B. Clayton Act
C. Robinson-Patman Act
D. Federal Trade Commission Act
15. Charging premium prices for lumber to hurricane victims because supply is limited is
A. unethical and illegal.
B. unethical and legal.
C. ethical and legal.
D. ethical and illegal.
16. One way that many businesses use technology to reduce the costs associated with marking prices on
products is by using
A. electronic scanning devices.
B. automated inventory systems.
C. preprinted gummed labels.
D. computer-generated tags.
17. Wal-Mart and Sears attract two different types of customers because of their pricing strategies. They
have
established their prices based on __________ decisions.
A. promotional
B. customer
C. place
D. profit
18. What pricing tactic might be considered questionable by some businesses?
A. Matching the prices of a competitor
B. Developing a complex pricing structure
C. Marking up prices to earn a profit
D. Providing a reference price