# Chapter 18 Advanced - Chapter 18 Advanced Level Quiz 1 The text says"markups A should always be stated as a percentage of cost B are a percentage

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Chapter 18 Advanced Level Quiz 1. The text says "markups": A. should always be stated as a percentage of cost. B. are a percentage of selling price--unless otherwise stated. C. are never stated as a percentage of cost. D. should never be stated in dollar amounts. 2. A retailer pays a wholesaler \$24.00 for an item and then sells it with a 25 percent markup. The retailer's selling price is: A. \$32.00. B. \$56.00. C. \$48.00. D. \$30.00. E. None of the above. 3. Which of the following is a TRUE statement about markups? A. A firm can lose money even when using a high markup. B. Markup percents are computed as a percent of the cost of the product. C. It's easier for a producer to administer the prices consumers pay for products if the markup used varies from one middleman to the next. D. The lower the markup, the lower the profit. 4. Average-cost pricing A. always results in a profit that is less than what was expected. B. will work out as expected when the firm's actual average fixed cost per unit is what was estimated when prices were set. C. sets the price at the point where average fixed cost is equal to average variable cost. D. ignores variable costs. E. is the only way to ensure that the firm will set a profitable price. 5. A typical break-even analysis assumes that: A. the fixed-cost contribution per unit increases as units sold increases. B. average fixed cost per unit is the same regardless of quantity sold. C. demand curves are downward sloping. D. average variable cost is the same regardless of quantity sold. 6. Which of the following statements concerning "reference prices" is FALSE? A. A reference price is the price consumers expect to pay for an item. B.

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## This note was uploaded on 04/26/2009 for the course MKT 320 taught by Professor Miller during the Spring '08 term at University of Texas at Austin.

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Chapter 18 Advanced - Chapter 18 Advanced Level Quiz 1 The text says"markups A should always be stated as a percentage of cost B are a percentage

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