# Marketing Study Set 20

## Quiz 11 :Pricing

Question Type
A profit maximization strategy is used during the growth and maturity stages of the product life cycle.
Free
True False

False

Tags
Choose question tag
Cost-plus pricing is not a very effective strategy for maximizing profits.
Free
True False

True

Tags
Choose question tag
Prices are generally more elastic in the early stages of the product life cycle and increasingly inelastic in the later stages of the product life cycle.
Free
True False

True

Tags
Choose question tag
Unbundling provides value for customers who are focused on a specific price point rather than the complete product offering.
True False
Tags
Choose question tag
Break-even analysis is an accurate measure of price sensitivity.
True False
Tags
Choose question tag
Customers are more price sensitive the higher the product's price is relative to the customers' price expectation.
True False
Tags
Choose question tag
Underpricing is a pricing strategy whereby companies charge an amount just below cost in order to generate sales in the introductory stage of a product's life cycle.
True False
Tags
Choose question tag
Price elasticity of demand is a measure of price sensitivity.
True False
Tags
Choose question tag
Once a firm has established its break-even point for a product, it has a starting point for estimating how much revenue it must generate to earn a profit.
True False
Tags
Choose question tag
Rent on an office building would be considered a fixed cost, while sales commissions would be considered a variable cost.
True False
Tags
Choose question tag
While shopping, Lucie sees a pair of jeans on sale for $29.99. She is excited because she has purchased this particular brand of jeans several times in the past for$40.00. In this instance, $40.00 is Lucie's fixed cost. True False Answer: Tags Choose question tag Dynamic pricing is a pricing strategy that involves pricing a product higher than competitors to signal that it is of higher quality. True False Answer: Tags Choose question tag Shrinkflation is when manufacturers "shrink" or reduce the price of their products during times of inflation. True False Answer: Tags Choose question tag Volume maximization is the same thing as penetration pricing. True False Answer: Tags Choose question tag An escalator clause ensures that the customer does not incur financial hardship as a result of increases to the cost of a product. True False Answer: Tags Choose question tag Loss-leader pricing involves selling a product at a price that causes the firm a financial loss. True False Answer: Tags Choose question tag A recreational watersports dealer reduced the price of its new jet skis by$1,000 in hopes of generating more sales. However, the lower price only resulted in a few more sales of the jet skis. This represents an elastic demand situation.
True False
Tags
Choose question tag
An odd pricing tactic prices items in odd dollar amounts, such as $4.95, instead of in even amounts, like$4.88.
True False