Question 1

Benito is the manager of a souvenir shop in Panama City,Florida.He has decided to graph the demand per week for fresh orange juice because its price varies as the supply of fresh oranges varies.The graph indicates a demand schedule that slopes downward and to the right.This graph indicates that the quantity of juice demanded increases as which of the following occurs?
A) price decreases
B) cost increases
C) price increases
D) supply increases

Accepted Answer

A downward-sloping demand curve indicates that as the price decreases, the quantity demanded increases, which is a fundamental principle of demand in economics.

Question 2

What occurs when an increase in sales exactly offsets a decrease in price so that total revenue remains exactly the same?
A) highly elastic demand
B) fixed elasticity
C) inelastic demand
D) unitary elasticity

Accepted Answer

When an increase in sales exactly offsets a decrease in price so that total revenue remains exactly the same, it indicates unitary elasticity, which means the change in price and quantity demanded are exactly proportional to each other, resulting in no change in total revenue.

Question 3

Aviary Industries produces and markets unfinished birdhouses to craft retailers.When graphed,the demand schedule for its birdhouses is a straight line.If one birdhouse costs $20,5,000 unfinished houses are sold.At $25,4,500 birdhouses are sold.How many birdhouses will be sold if the price per house is increased to $30?
A) 3,750
B) 3,500
C) 4,250
D) 4,000

Accepted Answer

The answer of Aviary Industries produces and markets unfinished birdhouses...

Question 4

Which of the following statements describes an advantage of status quo pricing?
A) Status quo pricing causes price wars.
B) Status quo pricing requires little planning.
C) Status quo pricing is derived from actual costs of manufacturing.
D) Status quo pricing maintains the organization's differential advantage.

Accepted Answer

Status quo pricing involves setting prices similar to competitors, which requires less market research and planning compared to strategies aiming for differentiation or cost leadership, making it a simpler approach for businesses to implement.

Question 5

Autumn Fair sells reusable plastic stencils for use in decorating.When graphed,the demand schedule for Autumn Fair brand stencils forms a straight line.If at $3 per stencil,500 stencils are demanded,and at $4 per stencil,450 stencils are ordered,how many will be ordered at a price of $6 per stencil?
A) 333
B) 350
C) 400
D) 375

Accepted Answer

The demand schedule forms a straight line, indicating a linear relationship. The slope of the demand line can be calculated as (450 - 500) / (4 - 3) = -50. Using the point-slope form of a line, we can find the demand at $6: 450 + (-50)(6 - 4) = 350.

Question 6

What is the term for the quantity of a product that will be offered to the market by suppliers at various prices for a specified period?
A) supply
B) equity
C) demand
D) inventory

Accepted Answer

The term for the quantity of a product that will be offered to the market by suppliers at various prices for a specified period is known as "supply".

Question 7

When Richard opened The Kite Hut,he charged $7 for kites and could not keep up with demand.The Kite Hut has raised the price to $10,and now Richard is still selling all the kites he carries,but he is not forced to reorder on a daily basis.The $10 price is probably which of the following?
A) a price equilibrium
B) an inelastic price
C) a symmetrical price
D) an inventory equalizer

Accepted Answer

A price equilibrium occurs when the quantity demanded equals the quantity supplied, and in this case, Richard is still selling all the kites he carries at the $10 price, but is not forced to reorder on a daily basis. This suggests that the market has found a balance between supply and demand at the $10 price point.

Question 8

The quantity of a product that people will buy/demand is most dependent on which of the following?
A) supply
B) quality parameters
C) price
D) promotion strategy

Accepted Answer

The quantity of a product that people will buy/demand is most dependent on the price. When the price of a product increases, the demand for it decreases and vice versa. This is known as the law of demand. Price is a key factor that affects consumer behavior and their decision to purchase a product.

Question 9

The responsiveness or the sensitivity of consumer demand to changes in price occurs when consumers buy more or less of a product when the price changes.What is this called?
A) the break-even point
B) elasticity of demand
C) the point of equilibrium
D) unitary revenue

Accepted Answer

The responsiveness or sensitivity of consumer demand to changes in price is called elasticity of demand. Options A, C, and D are not directly related to this concept.

Question 10

In a discount store Lee found a "sun kit" containing a beach towel,a sun visor,and sun block.The items,which were sold together,retailed at $18.50,but were marked down to $12.99.The retailer sold one for $18.50 and six at $12.99.Demand for the sun kit package is which of the following?
A) elastic
B) inelastic
C) synergistic
D) unitary

Accepted Answer

The answer of In a discount store Lee found a...

Question 11

Which of the following is defined as the quantity of a product that will be sold at various prices for a specified period?
A) demand
B) market share
C) supply
D) revenue

Accepted Answer

Demand is the quantity of a product that consumers are willing and able to buy at various prices during a specific time frame. It is generally represented by a demand curve, which shows the relationship between the price of the product and the quantity of the product that consumers are willing to purchase.

Question 12

What happens when demand is elastic?
A) As price goes up,revenue does not change.
B) As price goes down,revenue goes down.
C) As price goes down,revenue does not change.
D) As price goes up,revenue goes down.

Accepted Answer

When the demand is elastic, a change in price leads to a significant change in the quantity demanded. Therefore, if the price goes up, the demand for the product will decrease, leading to a decrease in revenue. Similarly, if the price goes down, the demand for the product will increase, also leading to a decrease in revenue. Therefore, as price goes up, revenue goes down when the demand is elastic.

Question 13

At a price of $6 each,314 people want to buy sun visors designed especially for volunteers at the Peachtree Road Race,and only 314 such visors were available.In this example,a state of which of the following has been achieved?
A) price equilibrium
B) symmetry
C) marketing balance
D) commerce stability

Accepted Answer

Price equilibrium has been achieved when the quantity demanded by buyers equals the quantity supplied by sellers at a specific price. In this case, the price of $6 has attracted exactly 314 buyers to purchase all the 314 available sun visors. Therefore, the market has achieved a state of price equilibrium. The other options such as symmetry, marketing balance, and commerce stability do not apply to this scenario.

Question 14

When consumers are sensitive to price changes,which of the following occurs?
A) elastic demand
B) inelastic supply
C) elastic supply
D) inelastic demand

Accepted Answer

When consumers are sensitive to price changes, it means that a small change in price leads to a large change in the quantity demanded, which is the definition of elastic demand.

Question 15

The price of the good or service is a key decision for a marketer because it most significantly and directly affects which of the following?
A) the product's promotion
B) the product's distribution
C) the product's demand
D) the product's quality

Accepted Answer

The price of a good or service directly affects the product's demand. If the price is too high, it may decrease demand and if the price is too low, it may increase demand but may also harm the profitability of the business. It is important for marketers to find the right price to meet their business goals and to create value for the customer. The price may indirectly affect the product's promotion and distribution, but ultimately it is the demand for the product that will determine these factors. The price also does not have a direct impact on the quality of the product.

Question 16

Which way do most demand curves slope?
A) upward and to the right
B) vertically
C) downward and to the right
D) downward and to the left

Accepted Answer

Most demand curves slope downward and to the right. This means that as prices increase, quantity demanded decreases.

Question 17

The quantity of products that will be sold in the market at various prices for a specified time period is referred to as which of the following?
A) demand
B) supply
C) equity
D) inventory

Accepted Answer

Demand refers to the quantity of products that consumers are willing and able to purchase at various prices over a specified time period.

Question 18

Although many factors can influence price,what are the primary determinants?
A) the demand for the good and the cost to the seller
B) demand by the consumer and perceived quality
C) stage of the product life cycle and costs to the consumer
D) costs of manufacturing and distribution

Accepted Answer

The primary determinants of price are the demand for the good and the cost to the seller. Demand refers to the level of interest or desire for the product among consumers, while cost refers to the expenses involved in producing, marketing, and distributing the product. Price is typically set at a point where demand and cost meet, allowing the seller to earn a profit while ensuring that the product is priced competitively relative to other similar products in the market. Other factors such as perceived quality, stage of the product life cycle, and manufacturing and distribution costs can also influence price, but demand and cost are the main drivers.

Question 19

What is the point at which there is no inclination for the price to rise or fall?
A) price symmetry
B) price stability
C) price status quo
D) price equilibrium

Accepted Answer

Price equilibrium refers to a state where the demand for a product or service is equal to the supply of the same product or service. At this point, there is no inclination for the price to rise or fall, and the market is said to be in a state of stability. Therefore, option D is the correct answer. Options A, B, and C are incorrect as they do not specifically refer to the state of a balanced market.

Question 20

Queeg Industries sells all types of artists' paint brushes.When the owner of Queeg learned that Patterson Art,one of its biggest competitors,had lowered its prices on all synthetic brushes by 5 percent,he did the same.This is an example of what type of pricing?
A) status quo
B) cost-plus
C) market share
D) predatory

Accepted Answer

This is an example of status quo pricing, where a company sets its prices based on what competitors are doing to maintain its position in the market, rather than trying to undercut competitors or significantly outprice them.

Quiz 16: Pricing Concepts

What occurs when an increase in sales exactly offsets a decrease in price so that total revenue remains exactly the same?

Which of the following statements describes an advantage of status quo pricing?

What is the term for the quantity of a product that will be offered to the market by suppliers at various prices for a specified period?

When Richard opened The Kite Hut,he charged $7 for kites and could not keep up with demand.The Kite Hut has raised the price to $10,and now Richard is still selling all the kites he carries,but he is not forced to reorder on a daily basis.The $10 price is probably which of the following?

The quantity of a product that people will buy/demand is most dependent on which of the following?

The responsiveness or the sensitivity of consumer demand to changes in price occurs when consumers buy more or less of a product when the price changes.What is this called?

In a discount store Lee found a "sun kit" containing a beach towel,a sun visor,and sun block.The items,which were sold together,retailed at $18.50,but were marked down to $12.99.The retailer sold one for $18.50 and six at $12.99.Demand for the sun kit package is which of the following?

Which of the following is defined as the quantity of a product that will be sold at various prices for a specified period?

What happens when demand is elastic?

At a price of $6 each,314 people want to buy sun visors designed especially for volunteers at the Peachtree Road Race,and only 314 such visors were available.In this example,a state of which of the following has been achieved?

When consumers are sensitive to price changes,which of the following occurs?

The price of the good or service is a key decision for a marketer because it most significantly and directly affects which of the following?

Which way do most demand curves slope?

The quantity of products that will be sold in the market at various prices for a specified time period is referred to as which of the following?

Although many factors can influence price,what are the primary determinants?

What is the point at which there is no inclination for the price to rise or fall?

Queeg Industries sells all types of artists' paint brushes.When the owner of Queeg learned that Patterson Art,one of its biggest competitors,had lowered its prices on all synthetic brushes by 5 percent,he did the same.This is an example of what type of pricing?