Objective 5 Practice Test

The owner of Wally’s Computers determined the costs of products to be $5000 per month, and sales and operating costs are $1000 per month. In order to cover costs, he or she has determined they will need to sell 12 computers at $500 each ($6000 total sales). This is an example of which cost determinant of price?

A local clothing store has chosen to price products so that the revenues will be as high as possible. This is an example of which type of pricing objective for a company?

The Pet Superstore receives dog food from a manufacturer for $10 per bag. The price it charges customers is $20 per bag. This is an example of which cost determinant of price?

After raising the price of its 32 oz bottle of water by fifteen percent, managers for Vitamin Water noticed sales decreased by twenty percent. This is an example of which

A local branch of a chain sandwich franchise closed its business. A locally owned sandwich store decided to increase its prices by ten percent. This is an example of which determinant of price?

City Convenience Store has a cost of $1.25 per sandwich. The owner adds an additional 60% to cover costs, bringing the total retail price to $2. This is an example of which cost determinant of price?

Krispy Kreme Donuts rapidly expanded its number of business locations in the late 1990s. The company set its prices in the new markets with the goal of increasing the percentage of the market it served. This is an example of which type of pricing objective for a company?

The owner of the Biltmore Bakery has determined he or she should raise the price of muffins because the product sells out before noon every day. This is an example of which factor affecting economic demand and the prices for a product in the marketplace?

Pharmaceutical companies always price a new drug high when it first enters the market to pay for research and development costs. This is an example of which determinant of price?

After the major holiday season ends in late December, most retailers will lower prices in an attempt to sell the maximum amount of products no longer sought by consumers. This is an example of which type of pricing objective for a company?

When Apple introduced the iPhone, customers waited in line for days for the chance to purchase one of the innovative products regardless of price. This is an example of which factor affecting economic demand and the prices for a product in the marketplace?

Heating contractors offer customers twenty percent off their bill if they schedule the work to be done during July. This is an example of which type of pricing adjustment?

Overstock.com charges customers $2.95 shipping per item, regardless of the destination. This is an example of which pricing tactic?

Lowes Home Improvement offers its customers a voucher to cover the cost of installation of a room of carpet. After installation, the customer must mail the voucher to the home office with a copy of the sales receipt. This is an example of which type of pricing adjustment?

The owner of the Raleigh Steakhouse will frequently visit other steakhouses to determine if prices are too high or too low and, if so, adjust prices to be somewhere in the middle. This is an example of which type of pricing objective for a company?

Creative Music is a new online music store. The owners have decided to charge ten cents less per song than iTunes and Yahoo Music in order to gain market share. This is an example of which type of pricing strategy?

John went into a local jewelry store and purchased a new watch. Later that day, he ran into a friend that had just purchased the same watch at the same store but paid $25 less. This is an example of which legal or ethical issue in regard to pricing?

Dollar General Stores offer every item in stock in one-dollar increments. For example, a notebook is $1, toothpaste is $2, etc. This is an example of which pricing tactic?

Preston Hardware offers industrial customers five percent off their bill if they pay within ten days. This is an example of which type of pricing adjustment?

Blockbuster Video not only rents, but also sells DVDs. Usually a customer can purchase one DVD for $14.99 or three DVDs for $30. This is an example of which pricing tactic?