Q&A Hero

Q: Which of the following statements regarding sales goals is most accurate? A. For marketing managers, sales revenue or unit sales can be easily translated into meaningful targets for a product line or brand. B. Cutting prices for a single product in a product line to raise unit sales often results in an increase in sales for related products in the line. C. Very often, cutting prices results in a decrease in market share. D. Setting unit volume sales as a pricing objective results in price wars with competitors, so the practice is limited to industries with few competitors. E. An advantage of increasing unit volume sales is that it always results in an increase in profits.

Q: All of the following statements about price are true EXCEPT: A. Small changes in price can have big effects on both the number of units sold and company profit. B. The price for a product or service must earn a profit for the company. C. For most products and services, their prices are always the same. D. The price must be right - in the sense that customers must be willing to pay it. E. The price must generate enough sales dollars to pay for the cost of developing, producing, and marketing the product.

Q: Given that a firm's profit is high enough for it to remain in business, an objective may be to __________, which will in turn lead to increases in market share and profit. A. increase the commitment to social responsibility B. increase dollar sales revenue C. decrease unit volume while maintaining price D. increase research and development funding for new product line extensions E. continue with previous policies that seem to be working

Q: A target return profit objective implies that a company chooses to A. set targets whose performance can be measured quickly. B. give up immediate profit in exchange for achieving a higher market share in hopes of penetrating competitive markets. C. set a profit goal that is often determined by its board of directors. D. reduce investment in any further market or product research. E. set prices based on return on sales.

Q: Which of the following is an example of a price? A. college tuition B. operating costs C. liquidity D. value E. stockholders' equity

Q: Three different objectives relate to a firm's profit, which have different implications for pricing strategy. The three profit-oriented objectives include managing for long-run profits, maximizing current profit objectives, and __________. A. accumulating profits B. reinvesting profits C. redistributing profits D. maximizing gross margin E. achieving a target return

Q: All of the following are synonyms for price EXCEPT: A. a premium. B. barter. C. tuition. D. a commission. E. profit.

Q: Three different objectives relate to a firm's profit, which is often measured in terms of return on investment. One objective, known as _________, occurs when a firm sets a profit goal, usually determined by its board of directors. A. maximizing current profit B. managing for long-run profits C. target return D. breakeven strategy E. minimizing risk

Q: From a marketing viewpoint, __________ is the money or other considerations (including other products and services) exchanged for the ownership or use of a product or service. A. value B. price C. barter D. currency E. a tariff

Q: A maximizing current profit objective implies that a company chooses to A. set targets whose performance can be measured quickly. B. give up immediate profit in exchange for achieving a higher market share in hopes of penetrating competitive markets. C. set a profit goal that is often determined by its board of directors. D. reduce investment in any further market or product research. E. set prices based on return on sales.

Q: Price refers toA. the value assigned to the exchange of products and services for other products and services.B. the value judgment made by both the buyer and seller regarding an item's worth.C. the money or other considerations (including other products and services) exchanged for the ownership or use of a product or service.D. the value assessed for the benefits of using a product or service.E. the highest monetary value a customer is willing to pay for a product or service.

Q: Three different objectives relate to a firm's profit, which is often measured in terms of return on investment. One objective, known as _________, is common in many firms because the targets can be set and performance measured quickly. A. managing for long-run profits B. target return C. breakeven strategy D. maximizing current profit E. minimizing risk

Q: The money or other considerations (including other products and services) exchanged for the ownership or use of a product or service is referred to as __________. A. a fee B. value C. renumeration D. price E. an exchange rate

Q: Managing for long-run profits as a pricing objective implies that a company will A. give up immediate profit in exchange for achieving a higher market share in hopes of penetrating competitive markets. B. maintain a given price range to ensure there is no loss of customers over time, even if the profit margin declines. C. invest excess cash in bonds and certificates of deposit in order to counteract any inflationary economic changes in the future. D. reinvest all profits into market or product research rather than returned to shareholders. E. drop all products, product lines, or divisions that cannot maintain their pricing goals.

Q: According to Vizio, "The whole goal is to ensure that we have the right product, at the right time and the right price and __________." A. forever rid the world of plugs and wires B. create customer value that is unmatched in the industry C. deliver it to the right people D. at the right place E. drive a seamless end-to-end value chain

Q: Three different objectives relate to a firm's profit, which have different implications for pricing strategy. The three profit-oriented objectives include __________, managing current profit, and achieving a target return. A. accumulating profits B. managing for long-run profits C. reinvesting profits D. redistributing profits E. maximizing gross margin

Q: Three pricing objectives relate to a firm's profit. In one known as __________, a company gives up immediate profit in exchange for achieving a higher market share in the hopes of penetrating competitive markets. A. maximizing current profit B. target return C. break-even strategy D. minimizing risk E. managing for long-run profits

Q: Vizio's HDTVs are sold through all of the following types of retailers EXCEPT: A. Amazon.com. B. mass merchandisers, such as Target. C. its own company stores. D. wholesale club stores such as Sam's Club. E. electronics stores such as Best Buy.

Q: A firm's profit objective is often measured in terms of ROA. The acronym ROA stands for __________. A. return on assets B. risk opportunity assessment C. return of allowances D. return on average equity E. risk opportunity analysis

Q: Vizio, Inc. is the largest contender in the North American __________ market. A. designer eyewear B. virtual media C. Smart TV D. 3D video game E. exotic travel

Q: A firm's profit objective is often measured in terms of ROI. The acronym ROI stands for __________. A. risk opportunity investment B. revised organizational incentives C. return on investment D. regulated organizational investments E. replenishment of organizational inventories

Q: North America's largest Smart TV company is A. Samsung. B. Panasonic. C. LG. D. Sony. E. Vizio.

Q: All of the following are examples of pricing objectives EXCEPT: A. market share. B. survival. C. unit sales. D. social responsibility. E. competitors' prices.

Q: Which of the following statements regarding pricing objectives is most accurate? A. Pricing objectives should never change. B. Pricing objectives may change depending on the financial position of the company. C. Pricing objectives may change depending upon the relative market share of competitors. D. Pricing objectives are established exclusively by the marketing department. E. Pricing objectives are extremely sensitive to even the slightest change in the local economy.

Q: Pricing objectives refer toA. reconciling the prices charged by an organization to the values set forth in its business mission.B. taking specific steps to capitalize on an organization's internal strengths as they apply to price.C. specifying the role of price in an organization's marketing and strategic plans.D. taking specific steps to compensate for an organization's weaknesses as they apply to price.E. subjectively setting intrinsic values to all products and services offered by an organization.

Q: Specifying the role of price in an organization's marketing and strategic plans is referred to as A. choosing a pricing plan. B. defining a profit mission. C. developing pricing constraints. D. setting pricing objectives. E. determining the list or quoted price.

Q: While pricing objectives frequently reflect corporate goals, pricing constraints often relate to A. stockholder demands. B. political ideology. C. conditions existing in the marketplace. D. an organization's code of ethics. E. the financial realities within the organization itself.

Q: Jason decided to open a small Internet caf serving a variety of unusual nonalcoholic beverages from around the world. He set a goal to break-even within the first six months and make a moderate profit thereafter. Within a week of opening, every seat was filled and he had to replenish inventory several times. At his six-month review, he was devastated to find that despite huge sales, he had actually lost money. His math was not wrong, but he had failed to include monthly expenses such as toilet paper, paper towels, and hand soap in his calculations. These costs should have appeared as __________ in his break-even analysis. A. fixed costs B. marginal costs C. variable costs D. overhead costs E. sunk costs

Q: Figure 11-6 Assuming there is no change in a product's price or the quantity demanded, if a business owner wants to increase her advertising expenses to a by $500 monthly, this would cause total costs to __________ and the break-even quantity to __________. A. decrease; stay the same B. increase; increase C. decrease; increase D. stay the same; increase E. increase; decrease

Q: Figure 11-6 Suppose you are the owner of a picture frame store and you wish to calculate how many pictures you must sell to cover your fixed and variable costs at a given price. Let's assume that the demand for your pictures is strong, so the average price customers are willing to pay for each picture frame is $120. Also, suppose your fixed costs (FC) total $32,000 (real estate taxes, interest on a bank loan, etc.) and unit variable cost (UVC) for a picture frame is $40 (labor, glass, frame, and matting). If your picture frame store sold 2,000 picture frames, what would your profit or loss be? A. a loss of $32,000 B. $0 - just able to break-even C. $32,000 profit D. $112,000 profit E. $128,000 profit

Q: Figure 11-6 Suppose you are the owner of a picture frame store and you wish to calculate how many pictures you must sell to cover your fixed and variable costs at a given price. Demand for pictures is strong, so the average price customers are willing to pay for each picture frame is $120. Also, suppose your fixed costs (FC) total $32,000 (real estate taxes, interest on a bank loan, etc.) and unit variable cost (UVC) for a picture frame is $40 (labor, glass, frame, and matting). What is the quantity of picture frames you will need to sell to break-even? A. 200 picture frames B. 400 picture frames C. 800 picture frames D. 1,600 picture frames E. 2,000 picture frames

Q: Figure 11-6 Suppose you are the owner of a picture frame store. Let's assume that the average price customers are willing to pay for each picture frame is $120. Also, suppose your fixed costs (FC) total $32,000 (real estate taxes, interest on a bank loan, etc.) and unit variable cost (UVC) for a picture frame is $40 (labor, glass, frame, and matting). Figure 11-6 above shows that by selling 800 picture frames, you will A. break even. B. earn a profit. C. incur a loss. D. have no fixed costs. E. have no variable costs.

Q: Figure 11-6 Suppose you are the owner of a picture frame store. Let's assume that the average price customers are willing to pay for each picture frame is $120. Also, suppose your fixed costs (FC) total $32,000 (real estate taxes, interest on a bank loan, etc.) and unit variable cost (UVC) for a picture frame is $40 (labor, glass, frame, and matting). According to Figure 11-6 above, how much profit will your picture frame store make if it sells 400 picture frames? A. $48,000 B. $32,000 C. $16,000 D. $0 E. ($32,000)

Q: Figure 11-6 Suppose you are the owner of a picture frame store. Let's assume that the average price customers are willing to pay for each picture frame is $120. Also, suppose your fixed costs (FC) total $32,000 (real estate taxes, interest on a bank loan, etc.) and unit variable cost (UVC) for a picture frame is $40 (labor, glass, frame, and matting). Figure 11-6 above shows that by selling 200 pictures, your picture frame store will A. break even. B. earn a profit. C. incur a loss. D. have no fixed costs. E. have no variable costs.

Q: Figure 11-6 In Figure 11-6 above, which is a break-even chart that depicts a graphic presentation of a break-even analysis for a picture frame store, the area CGD represents the firm's A. fixed costs. B. break-even point. C. variable costs. D. profit. E. total revenue.

Q: Figure 11-6 In Figure 11-6 above, which is a break-even chart that depicts a graphic presentation of a break-even analysis for a picture frame store, the triangular area GAF represents the firm's A. fixed costs. B. break-even point. C. variable costs. D. profit. E. total revenue.

Q: Figure 11-6 In Figure 11-6 above, which is a break-even chart that depicts a graphic presentation of a break-even analysis for a picture frame store, the triangular area FBE represents the firm's A. fixed costs. B. break-even point. C. variable costs. D. profit. E. total revenue.

Q: Figure 11-6 In Figure 11-6 above, which is a break-even chart that depicts a graphic presentation of a break-even analysis for a picture frame store, the rectangular area EBCD represents the firm's A. fixed costs. B. break-even point. C. variable costs. D. profit. E. total revenue.

Q: Figure 11-6 In Figure 11-6 above, which is a break-even chart that depicts a graphic presentation of a break-even analysis for a picture frame store, the red (darkest) wedge ABC represents the firm's A. fixed costs. B. break-even point. C. loss. D. profit. E. total revenue.

Q: Figure 11-6 In Figure 11-6 above, which is a break-even chart that depicts a graphic presentation of a break-even analysis for a picture frame store, point A identifies the firm's __________ point. A. loss B. price C. margin D. profit E. break-even

Q: Figure 11-6 Figure 11-6 above depicts a __________. A. Gantt chart B. demand curve C. break-even chart D. ROI analysis E. cross-tabulation

Q: A break-even chart refers to a graphic presentation A. that shows the maximum number of units that will be sold at a certain price. B. that shows when total revenue and total cost intersect to identify profit or loss for a given quantity sold. C. that relates variable costs in terms of product or service substitutes in order to determine which items or services would least affect total revenues. D. that relates profits and revenues versus total costs in order to determine the time frame in which a company could achieve profitability. E. is a form of scatter graph used to identify specific activities or items that are creating the greatest return on investment.

Q: A graphic presentation of the break-even analysis that shows when total revenue and total cost intersect to identify profit or loss for a given quantity sold is referred to as a(n) __________. A. Gantt chart B. demand curve C. ROI analysis D. cross-tabulation E. break-even chart

Q: Figure 11-5 Jane Westerlund owns a picture frame store and has generated a spreadsheet of several calculations based on different quantity, price, revenue, cost, and profit scenarios shown in Figure 11-5 above. Of the following options, at what sales level is profit maximized? A. 0 B. 400 C. 800 D. 1,600 E. 2,000

Q: Figure 11-5 Jane Westerlund owns a picture frame store and has generated a spreadsheet of several calculations based on different quantity, price, revenue, cost, and profit scenarios shown in Figure 11-5 above. What is the break-even point quantity for her picture frame store? A. 0 B. 400 C. 800 D. 1,200 E. 2,000

Q: Ampro-Mag is a small company that makes materials for safely controlling hazardous spills of all kinds. It sells these items as a neutralizing kit priced at $100. The costs of the materials that go into each kit are $45. It costs $5 in labor to assemble a kit. The company has monthly expenses of $1,000 for rent and insurance, $200 for heat and electricity, $500 for advertising in trade journals, and $3,500 for the monthly salary of its owner. What is Ampro-Mag's monthly break-even point in terms of number of neutralizing kits sold? A. 40 kits B. 52 kits C. 104 kits D. 116 kits E. 520 kits

Q: Tim Marlow, the owner of The Clock Works, wanted to know how many clocks he must sell in order to cover his fixed cost at a given price. Tim knew that he had total fixed costs of $20,000 for equipment, taxes, and a bank loan. He also had a unit variable cost of $20 per clock for labor and materials. If the price Tim charges for each of his clocks is $40, what is his break-even point quantity? A. 100 clocks B. 334 clocks C. 500 clocks D. 1,000 clocks E. 10,000 clocks

Q: You are selling a new line of T-shirts on the boardwalk. The selling price will be $25 per shirt. The labor cost is $5 per shirt. The administrative costs of operating the company are estimated to be $60,000 annually and the sales and marketing expenses are $20,000 a year. Additionally, the cost of materials will be $10 per shirt. What is the break-even quantity? A. 2,000 shirts B. 3,200 shirts C. 5,334 shirts D. 8,000 shirts E. 16,000 shirts

Q: Each month, the owner of a carwash pays $2,500 in rent, $500 in utilities, $750 interest on the business loan, an insurance premium of $200, and $250 on advertising on local bus routes. A full-service carwash is priced at $10.50. Unit variable costs for the carwash are $7.50. At what level of revenue will the carwash break-even? A. $4,200 B. $10,500 C. $14,700 D. $30,000 E. $39,900

Q: The owner of a take-out fried chicken and biscuits restaurant pays each month $2,500 in rent, $500 in utilities, $750 loan interest, $200 insurance premium, and $250 on local bus advertising. A bucket of chicken is priced at $9.50. Variable costs for the bucket are $5.50. How many buckets of chicken does the restaurant need to sell to break-even each month? A. 442 buckets B. 764 buckets C. 1,050 buckets D. 3,150 buckets E. 4,200 buckets

Q: The break-even point (BEP) = [Fixed cost (__________ - Unit variable cost)]. A. Total cost B. Total expense C. Fixed cost D. Unit variable cost E. Unit price

Q: The break-even point (BEP) = [__________ (Unit price - Unit variable cost)]. A. Total cost B. Total expense C. Fixed cost D. Unit variable cost E. Total number of units produced or quantity

Q: The break-even point (BEP) = [Fixed cost (Unit price - __________)]. A. Total cost B. Total expense C. Marginal revenue D. Unit variable cost E. Total number of units produced or quantity

Q: The quantity at which total revenue and total cost are equal is referred to as (the) A. tipping point. B. profitability point. C. incremental return on investment. D. break-even point. E. zero margin.

Q: A technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output is referred to as __________. A. break-even analysis B. marginal analysis C. sensitivity analysis D. market analysis E. tipping point analysis

Q: Break-even analysis refers to A. a process that investigates the difference between marginal revenue and marginal cost. B. a method of determining just how much a consumer is willing to pay for a product or service. C. a technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output. D. the process of determining the quantity of product consumers will buy relative to the quantity produced by the firm. E. the graph that shows the maximum number of products consumers will buy at a given price.

Q: Forever Quilting is a small company that makes quilting kits priced at $120. The costs of the materials that go into each kit total $45. It costs $5 in labor to assemble a kit. The company has monthly expenses of $1,000 for rent and insurance, $200 for heat and electricity, $500 for advertising, and $4,500 for the monthly salary of its owner. Forever Quilting's unit variable cost for its kits is A. $5. B. $45. C. $50. D. $120. E. $170.

Q: The unit variable cost (UVC) equals variable cost (VC) divided by __________. A. quantity (Q) B. fixed costs (FC) C. total cost (TC) D. total revenue (TR) E. price per unit of the product (P)

Q: Unit variable cost refers to variable cost expressed A. as the sum of all units sold. B. on a per unit basis for a product. C. as a percentage of total sales. D. as a percentage of fixed costs. E. as a percentage of total costs.

Q: Which of the following is a typical example of a variable cost? A. shipping costs B. rent on a building C. executive salaries D. insurance premiums E. leases on delivery trucks

Q: The sum of the expenses of the firm that change with the quantity of the product that is produced and sold is referred to as A. fixed cost. B. total cost. C. marginal cost. D. unit cost. E. variable cost.

Q: Variable cost refers to A. the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold. B. the sum of the expenses of the firm that change with the quantity of a product that is produced and sold. C. the total expense incurred by a firm in producing and marketing a product, which equals the sum of fixed cost and marginal cost. D. the average amount of money received for selling one unit of a product or simply the price of that unit. E. the change in total cost that results from producing and marketing one additional unit of a product.

Q: Which of the following would be an example of a fixed cost for a company that makes carbon monoxide monitoring systems for employees to wear that work in hazardous areas? A. the lithium batteries that are used in each monitor B. the chest harness used to wear the monitor C. the insurance for the company's factory D. the free training videos that are sent to each new customer E. the stainless steel, water-resistant cases in which the monitors are contained

Q: Which of the following is a typical example of a fixed cost? A. taxes B. raw materials C. sales commissions D. building rental expense E. hourly wages

Q: Rent, executive salaries, and insurance are typical examples of A. variable costs. B. fixed costs. C. unit costs. D. marginal costs. E. total costs.

Q: The sum of the expenses of a firm that is stable and does not change with the quantity of the product that is produced and sold is referred to as A. fixed cost. B. total cost. C. variable cost. D. marginal cost. E. overhead cost.

Q: Fixed cost refers to A. the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold. B. the total expense incurred by a firm in producing and marketing a product, which equals the sum of overhead cost and variable cost. C. the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold. D. the average amount of money received for selling one unit of a product or simply the price of that unit. E. the change in expenses that results from producing and marketing one additional unit of a product.

Q: Total cost refers to A. the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold. B. the change in expenses that results from producing and marketing one additional unit of a product. C. the average amount of money received for selling one unit of a product or simply the price of that unit. D. the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold. E. the total expense incurred by a firm in producing and marketing a product, which equals the sum of fixed cost and variable cost.

Q: The total expense incurred by a firm in producing and marketing a product, which equals the sum of fixed cost and variable cost, is referred to as A. overhead cost. B. total cost. C. unit cost. D. average cost. E. marginal cost.

Q: Four cost concepts are important in pricing decisions: total cost, variable cost, unit variable cost, and __________. A. dividend cost B. liquidity cost C. discretionary cost D. fixed cost E. elastic cost

Q: Forever Quilting is a small company that makes quilting kits priced at $120 each. There is no quantity discount. The costs of the materials that go into each kit total $45. It costs $5 in labor to assemble a kit. The company has monthly expenses of $1,000 for rent and insurance, $200 for heat and electricity, $500 for advertising, and $4,500 for the monthly salary of its owner. Last month the company sold 150 kits. Forever Quilting's total revenue for the month was A. $4,300. B. $6,200. C. $7,500. D. $10,500. E. $18,000.

Q: SHAPE magazine is targeted at young women seeking healthier lifestyles. At a price of $3.00 per copy, 1.25 million copies are sold. If the price per issue is increased to $3.25, only 1 million copies would be sold. Fixed costs are $1 million and unit variable costs are $0.50 per magazine. From the information provided here, what is SHAPE magazine's total revenue obtained at the lower $3.00 price? A. $3,750,000 B. $3,250,000 C. $3,000,000 D. $2,125,000 E. $1,750,000

Q: Total revenue refers to A. the profit made from selling a product or service. B. the net gain in sales revenue if the unit price is lowered. C. the least number of units sold needed to cover product, distribution, and promotional costs. D. the amount at which marginal costs exceed fixed costs. E. the total money received from the sale of a product.

Q: The total money received from the sale of a product is referred to as __________. A. profit B. total revenue C. average revenue D. marginal revenue E. derived demand

Q: The manufacturer of a new kind of fat-free ice cream that has the consistency and taste of regular ice cream is thinking of using a penetration pricing strategy for its new product. Which of the following conditions would argue AGAINST using a penetration pricing strategy for the tasty fat-free ice cream? A. The ice cream market is highly elastic. B. A large portion of the market has inelastic demand for ice cream over a broad range of prices. C. Economies of scale in production would be substantial. D. Retailers are not willing to pay for new brands of premium ice cream in the already overcrowded category. E. Once the initial price is set, it is nearly impossible to lower prices without alienating buyers.

Q: If a firm finds the demand for one of its products is inelastic, it can increase its total revenues by A. lowering its price. B. increasing fixed costs only. C. increasing variable costs only. D. increasing both fixed and variable costs. E. raising its price.

Q: Inelastic demand exists when A. a small percentage decrease in price produces a smaller percentage increase in quantity demanded. B. a small percentage increase in price produces a larger percentage increase in quantity demanded. C. an increase in price is impossible due to government restrictions. D. the quantity demanded remains the same regardless of any changes in marketing strategies. E. a small percentage decrease in price produces a smaller percentage increase in quantity supplied.

Q: Several companies produce latex gloves that are used in a variety of different industries. If one of the glove manufacturers decreases its price by just a few percentage points, it will result in a significant increase in quantity demanded. The demand for latex gloves is A. synergistic. B. inelastic. C. unitary. D. elastic. E. static.

Q: Elastic demand exists whenA. a small percentage decrease in price produces a smaller percentage increase in quantity demanded.B. a small percentage decrease in price produces a larger percentage increase in quantity demanded.C. an increase in price causes a larger increase in quantity demanded.D. the quantity demanded remains the same regardless of level of price.E. no change in price produces a small percentage change in quantity demanded.

Q: For the sake of simplicity and by convention, price elasticity figures are shown as __________. A. positive numbers (0.64, 1.25, etc.) B. negative numbers (-0.64, -1.25, etc.) C. Greek letters (u00e2u02c6u2018, u00e2u02c6u008f, etc.) D. Roman numerals (I, V, X, etc.) E. English consonants (P, Q, TR, etc.)