1) ________ refers to the amount of money charged for a product or service.

A) Payroll
B) Profit
C) Price
D) Cost
E) Salary
2) ________ is the only element in the marketing mix that produces revenue.
A) Price
B) Place
C) Promotion
D) Product
E) Profit
3) Which of the following sets the upper limit for a product's pricing?
A) profits
B) product costs
C) consumer perceptions of value
D) elements of the product mix
E) competition
4) Which of the following sets the lower limit for a product's pricing?
A) product costs
B) profits
C) competition
D) elements of the product mix
E) consumer perceptions of value
5) ________ uses buyers' perceptions of what a product is worth as the key to pricing.
A) Customer value-based pricing
B) Target return pricing
C) Cost-plus pricing
D) Psychological pricing
E) Competition-based pricing
6) Value-based pricing is the reverse process of ________ pricing.
A) good-value
B) target costing
C) cost-based
D) value-added
E) competition-based
7) A value-based pricing strategy most likely begins with ________.
A) assessing customer needs
B) designing a stylish product
C) evaluating the product's costs

D) promoting the product's benefits

E) setting a price based on perceived value
8) ________ pricing involves charging a constant low price with few or no temporary price
discounts.
A) High-low
B) Target return
C) Cost-plus
D) Everyday low
E) Market-skimming
9) Providing extra amenities to differentiate and support high-priced products is referred to as
________ pricing.
A) high-low
B) value-added
C) target return
D) everyday low
E) cost-plus
10) ________ pricing involves setting prices based on the expenses involved in producing,
distributing, and selling a product plus a fair rate of return for a company's effort and risk.
A) Competition-based
B) Value-added
C) Cost-based
D) Good-value
E) Demand-based
11) Rent, electricity, and executive salaries that do not vary with production level are referred to
as ________ costs.
A) fixed
B) variable
C) break-even
D) target
E) promotional
12) ________ costs are also known as overhead.
A) Fixed
B) Variable
C) Target
D) Capital
E) Payroll

13) Costs that change directly with the level of production are referred to as ________ costs.
A) fixed
B) variable
C) target
D) capital
E) payroll
14) ________ costs refer to the sum of the fixed and variable costs for any given level of
production.
A) Target
B) Marginal
C) Value-based
D) Total
E) Break-even
15) A company designs what it considers to be a good product, calculates the expenses of making
the product, and sets a price that adds a standard markup to the cost of the product. This
approach to pricing is called ________ pricing.
A) value-added
B) good-value
C) cost-plus
D) competitor-based
E) break-even
16) ________ pricing is when a firm tries to determine the price at which it will break even or
make the profit it is seeking.
A) Competition-based
B) Target return
C) Cost-plus
D) Good-value
E) Value-added
17) The Fashion Store, a new startup, sets product prices so that revenues will equal
manufacturing and marketing costs. The pricing strategy used by the company is referred to as
________ pricing.
A) good-value
B) value-added
C) cost-plus
D) competition-based
E) target return

18) Which of the following statements about break-even analysis is most likely true?
A) It determines how customer-perceived value changes with value-added pricing.
B) It is a tool used to calculate fixed costs.
C) It is used to determine the maximum price that can be set on a product.
D) It is a tool marketers use to examine the relationship between supply and demand.
E) It fails to consider customer value and the relationship between price and demand.
19) Which of the following is an external factor that affects pricing decisions?
A) the marketing mix
B) competition
C) top management
D) marketing objectives
E) marketing strategy
20) Radox, a luxury watch brand, identifies a market segment that is willing to pay premium
prices for its watches, and Radox managers select an ideal selling price. Managers then
determine the costs to create watches that meet the ideal selling price. The company's pricing
approach is referred to as ________.
A) mass production
B) cost-plus pricing
C) target costing
D) value-added pricing
E) target return pricing
21) In ________, the market consists of many buyers and sellers trading in a uniform
commodity, such as wheat, copper, or financial securities.
A) pure competition
B) monopolistic competition
C) oligopolistic competition
D) a pure monopoly
E) a pure monopsony
22) There are more than 20 stores on a street in Sao Paulo that specialize in selling the same
quality and brand of wheat products. An individual seller cannot charge more than the going
market price without the risk of losing business to the other stores. What type of market does this
example represent?
A) pure competition
B) monopolistic competition
C) oligopolistic competition
D) a pure monopoly
E) a black market

23) Under ________, the market consists of many buyers and sellers trading over a range of
prices rather than a single market price.
A) pure competition
B) monopolistic competition
C) oligopolistic competition
D) a pure monopoly
E) a pure monopsony
24) Under ________, the market consists of a few large sellers who are highly sensitive to each
other's pricing and marketing strategies.
A) pure competition
B) monopolistic competition
C) oligopolistic competition
D) a pure monopoly
E) pure monopsony
25) The relationship between the price charged for a product and the resulting demand level can
be shown in a ________.
A) demand curve
B) supply curve
C) elastic demand slope
D) break-even chart
E) inelastic demand slope
26) When demand hardly changes with a small change in the price of a product, then the demand
for the product is best described as ________.
A) elastic
B) flexible
C) inelastic
D) variable
E) cyclical
27) Which of the following is an economic factor that affects the pricing decisions of a
company?
A) market-penetration practices
B) top management decisions
C) promotional activities
D) reseller policies
E) interest rates

28) A firm uses ________ when it charges a high, premium price for a new product with the
intention of reducing the price in the future.
A) market-skimming pricing
B) target costing
C) deceptive pricing
D) market-penetration pricing
E) predatory pricing
29) The strategy of setting a low initial price to attract a large number of buyers quickly and win
a large market share is referred to as ________.
A) market-skimming pricing
B) market-penetration pricing
C) value-added pricing
D) target costing
E) deceptive pricing
30) Which of the following conditions is most likely essential for implementing a successful
market-skimming pricing strategy for a product?
A) The product's quality and image support its high price.
B) Lower-priced alternatives can enter the market easily.
C) Low prices promote more market growth than high prices.
D) The product's price matches its manufacturing costs.
E) A low-price position of the product is maintained.