Quiz_166 - 96 -$.99insteadof$1.00and$9.99insteadof $10.00. . surveystodet

Quiz_166 - 96 -$.99insteadof$1.00and$9.99insteadof $10.00....

This preview shows page 1 - 2 out of 4 pages.

96) Many firms use odd pricing-charging prices such as $.99 instead of $1.00 and $9.99 instead of$10.00. One reason for this pricing strategy is that consumers will somehow believe that thedifference in price appears to be greater than it actually is. Researchers conducted consumersurveys to determine whether this is actually the case. What was the result of these surveys?A) Although the results were not conclusive, there is some evidence that odd pricing makeseconomic sense.B) The survey results were inconclusive because most consumers gave unreliable responses tothe survey questions.C) The surveys found indifference regarding this strategy among most consumers, but hostilityamong other consumers. The latter group resented what they viewed as an attempt to foolthem into buying products with odd prices. Researchers concluded that odd pricing iscounterproductive.D) The surveys found that small differences in price cause small differences in quantitydemanded. There is no evidence that odd pricing makes economic sense.Answer: A96)Diff: 2Page Ref: 531-532/531-532Topic: Odd PricingLearning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies inoligopoliesAACSB: Reflective Thinking97) When firms price their products by adding a percentage markup to their average costs ofproduction, this is called97)Diff: 1Page Ref: 532/532Topic: Cost-Plus PricingLearning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies inoligopoliesAACSB: Reflective Thinking98) If, at a firmʹs projected sales level, the marginal cost is $125, the average cost is $150 and themarkup is 20 percent, then its selling price is98)Diff: 3Page Ref: 532/532Topic: Pricing StrategyLearning Outcome: Micro 20: Apply the concepts of opportunity cost, marginal analysis, and present value tomake decisionsAACSB: Analytic Skills

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture