Question 1

Price serves the function of ____ for goods, services, and financial resources.
A) distributor
B) determining factor
C) screener
D) quantifier
E) allocator

Accepted Answer

Price serves as an allocator by determining how goods, services, and financial resources are distributed among various users. It allocates resources by signaling where they are most valued and needed based on willingness and ability to pay.

Question 2

____ competition is based on factors such as product quality, promotion, customer service, and packaging.
A) Product or brand
B) Price
C) Image
D) Nonprice
E) Strategic

Accepted Answer

Nonprice competition focuses on factors other than price, such as product quality, promotion, customer service, and packaging.

Question 3

The 3M Company is willing to supply 50 million Scotch brand videotapes at $4 each.Buyers are willing to purchase 50 million videotapes at $4 each.The $4 price is referred to as the ____ price.
A) equilibrium
B) odd
C) even
D) variable
E) breakeven

Accepted Answer

The $4 price is referred to as the equilibrium price because it is the price at which the quantity of supply and demand are equal, meaning there is no shortage or surplus of tapes.

Question 4

The part of the package that contains the presentation of information on a product is called a _____.
A) brand
B) trademark
C) label
D) Universal Product Code
E) warranty statement

Accepted Answer

A label is the part of the package that contains information about the product, such as its ingredients, directions for use, and nutritional information. A brand is the name or symbol that identifies a company or its products. A trademark is a legal symbol that protects a brand's identity. A Universal Product Code is a barcode that identifies a specific product, and a warranty statement is a document that outlines a company's guarantee or promise to replace or repair a product if it fails within a certain timeframe. Therefore, the most appropriate answer is C, label.

Question 5

The 3M Company considers its Scotch brand of videotapes superior to other brands.To communicate the product's superior quality, which price may be appropriate for Scotch videotapes?
A) low
B) average
C) premium
D) discount
E) prevailing

Accepted Answer

A premium price would communicate the idea of superior quality and differentiate Scotch videotapes from other brands. A low or discount price may communicate an inferior quality, and an average or prevailing price may not communicate any differentiation.

Question 6

Ginger bought a new bread machine.Inside the packaging she found a paper stating, "All our products will be replaced within the first year if they fail to operate correctly.However, consumer misuse or abuse will effectively end this policy." This is a(n)
A) label.
B) set of instructions for use.
C) statement of guarantee.
D) implied warranty.
E) express warranty.

Accepted Answer

This is an express warranty, as it explicitly states the conditions under which the product will be replaced if it fails to operate correctly within the first year.

Question 7

Price competition occurs when a seller emphasizes the
A) low price of a product.
B) high price of a product.
C) quality of a product.
D) quality of the customer service.
E) importance of the product.

Accepted Answer

Price competition refers to when a seller emphasizes the low price of a product compared to its competitors.

Question 8

A number of federal regulations specify the information that must be included in labeling.Which of the following is not specified?
A) fabric content
B) safety precautions
C) ingredient content
D) packaging content to indicate whether the package is recyclable
E) fabric cleaning instructions

Accepted Answer

While there are federal regulations regarding environmental sustainability and packaging waste reduction, there is currently no requirement for packaging content to indicate whether the package is recyclable.

Question 9

Walgreen's advertises the fact that Bayer aspirin may cost more but works no better than Walgreen's own brand of aspirin.In this example, Walgreen's is competing on the basis of _____.
A) selection
B) packaging
C) service
D) price
E) market share

Accepted Answer

Walgreen's is competing on the basis of price, by highlighting that their own brand of aspirin is cheaper than the competing Bayer brand, and works just as well.

Question 10

The amount of money that a seller is willing to accept in exchange for a product, at a given time and under given circumstances, is called the _____.
A) revenue
B) income
C) discount
D) price
E) breakeven quantity

Accepted Answer

The definition describes the concept of price. Revenue refers to the total amount of money that a business earns through sales, income is a broader term that includes other sources of money and not just sales, discount refers to a reduction in price from the original price, and breakeven quantity is the amount of products a business needs to sell in order to cover all its costs.

Question 11

When price helps Josh decide to purchase a Chevrolet Cavalier instead of a Mercedes because he also wants a Harley-Davidson motorcycle, price serves the function of _____.
A) demander
B) decision maker
C) facilitator
D) intermediation
E) allocator

Accepted Answer

The answer of When price helps Josh decide to purchase...

Question 12

If a company invests $1,000,000 to develop and market a new product with a goal of earning $1,200,000 on the product by the end of the year, it will price the product based on
A) profit expectations.
B) market share goals.
C) return on investment goals.
D) survival goals.
E) objectives.

Accepted Answer

The company's goal of earning $1,200,000 on a $1,000,000 investment by the end of the year indicates a specific return on investment (ROI) goal. Pricing the product to achieve this financial return aligns with return on investment goals.

Question 13

The presentation of information on a product or its package is known as _____.
A) branding
B) labeling
C) guaranteeing
D) informing
E) product coding

Accepted Answer

Labeling refers to the presentation of information on a product or its package, including brand name, ingredients, nutritional information, warnings, and more. Branding involves creating a unique name, design, and image for a product or company. Guaranteeing refers to providing assurance of quality or performance, typically through a warranty or return policy. Informing can refer to any type of communication or education provided to customers about a product or service. Product coding involves using a system of numbers or letters to identify and track products.

Question 14

A major drawback of price competition is that
A) it lowers prices.
B) it gains customers.
C) customers equate lower prices with lower quality.
D) competitors can also lower their prices.
E) it generates brand loyalty.

Accepted Answer

The answer of A major drawback of price competition is...

Question 15

The quantity of a product that buyers are willing to purchase at each of various prices is called _____.
A) breakeven quantity
B) supply
C) distended supply
D) inventory
E) demand

Accepted Answer

The quantity of a product that buyers are willing to purchase at each of various prices is called demand. Breakeven quantity refers to the point where total costs and total revenue are equal. Supply refers to the quantity of a product that sellers are willing to offer at various prices. Distended supply and inventory are not relevant terms in this context.

Question 16

The quantity of a product that a producer is willing to sell at each of various prices is called _____.
A) supply
B) inventory
C) stock
D) demand
E) breakeven quantity

Accepted Answer

The quantity of a product that a producer is willing to sell at each of various prices is called supply.

Question 17

If Nordstrom sales associates are there to greet you as soon as you walk through the door, to assist you personally in finding the merchandise you are looking for, and to inform you about the store's events and services, the company is striving to compete on _____.
A) quality
B) service
C) promotion
D) price
E) distribution

Accepted Answer

Nordstrom is competing on providing excellent service to its customers by having sales associates greet customers, provide personal assistance, and inform them about the store's events and services.

Question 18

The label on a bag of Fritos is not required to describe the
A) number of servings it contains.
B) number of calories derived from fat.
C) safety precautions.
D) number of calories per serving.
E) serving size.

Accepted Answer

The label on a bag of Fritos, like other food products, is required by law to include nutritional information such as the number of servings it contains, the number of calories derived from fat, the number of calories per serving, and the serving size. Safety precautions are not a standard requirement for food labels, as they primarily focus on nutritional information and ingredients.

Question 19

Buyers may relate price to quality.To such a buyer, a higher price for a product is an indicator of
A) suspicious pricing.
B) higher quality.
C) product availability.
D) poor image.
E) greater quantity.

Accepted Answer

Buyers who relate price to quality believe that a higher price is an indicator of higher quality. They are willing to pay more for a product they perceive as being of higher quality.

Question 20

Which of the following constitutes an ROI?
A) amount earned from sales before taxes
B) amount realized from cutting production costs
C) amount earned as a result of a return on investment
D) amount, or ratio, that represents rate of investment
E) amount earned as gross income

Accepted Answer

ROI stands for "return on investment," which means the amount earned as a result of a return on investment. This is the only option that directly pertains to ROI.

Quiz 12: Creating and Pricing Products That Satisfy Customers

Price serves the function of ____ for goods, services, and financial resources.

____ competition is based on factors such as product quality, promotion, customer service, and packaging.

The 3M Company is willing to supply 50 million Scotch brand videotapes at $4 each.Buyers are willing to purchase 50 million videotapes at $4 each.The $4 price is referred to as the ____ price.

The part of the package that contains the presentation of information on a product is called a _____.

The 3M Company considers its Scotch brand of videotapes superior to other brands.To communicate the product's superior quality, which price may be appropriate for Scotch videotapes?

Ginger bought a new bread machine.Inside the packaging she found a paper stating, "All our products will be replaced within the first year if they fail to operate correctly.However, consumer misuse or abuse will effectively end this policy." This is a(n)

Price competition occurs when a seller emphasizes the

A number of federal regulations specify the information that must be included in labeling.Which of the following is not specified?

Walgreen's advertises the fact that Bayer aspirin may cost more but works no better than Walgreen's own brand of aspirin.In this example, Walgreen's is competing on the basis of _____.

The amount of money that a seller is willing to accept in exchange for a product, at a given time and under given circumstances, is called the _____.

When price helps Josh decide to purchase a Chevrolet Cavalier instead of a Mercedes because he also wants a Harley-Davidson motorcycle, price serves the function of _____.

If a company invests $1,000,000 to develop and market a new product with a goal of earning $1,200,000 on the product by the end of the year, it will price the product based on

The presentation of information on a product or its package is known as _____.

A major drawback of price competition is that

The quantity of a product that buyers are willing to purchase at each of various prices is called _____.

The quantity of a product that a producer is willing to sell at each of various prices is called _____.

If Nordstrom sales associates are there to greet you as soon as you walk through the door, to assist you personally in finding the merchandise you are looking for, and to inform you about the store's events and services, the company is striving to compete on _____.

The label on a bag of Fritos is not required to describe the

Buyers may relate price to quality.To such a buyer, a higher price for a product is an indicator of

Which of the following constitutes an ROI?