This preview shows pages 1–3. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: Chapter 17 Quiz - Price Setting in the Business World 1. The text says &quot;markups&quot;: 1. should always be stated as a percentage of cost. 2. are a percentage of selling price--unless otherwise stated. 3. are never stated as a percentage of cost. 4. should never be stated in dollar amounts. 5. All of the above except B. Feedback: LearnObj: 1 Page: 439 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: 1. $32.00. 2. $56.00. 3. $48.00. 4. $30.0. 5. None of the above. Feedback: LearnObj: 1 Page: 439 3. The markup approach to price setting used by most intermediaries: 1. makes little sense--given the large number of items carried and the small sales volume of any one item. 2. is very inflexible because the same markup percent must be applied to all products. 3. often uses the trade (functional) discount allowed by the manufacturer. 4. is quite complicated--because each product has a different delivered cost. 5. All of the above. Feedback: LearnObj: 1 Page: 440 4. Which of the following is a TRUE statement about markups? 1. A firm can lose money even when using a high markup. 2. Markup percents are computed as a percent of the cost of the product. 3. It's easier for a producer to administer the prices consumers pay for products if the markup used varies from one intermediary to the next. 4. The lower the markup, the lower the profit. 5. None of the above is true. Feedback: LearnObj: 1 Page: 440 5. With respect to markups and turnover, a marketing manager should be aware that: 1. a low stockturn rate increases inventory carrying costs. 2. depending on the industry, a stockturn rate of 2 or 3 may be quite profitable. 3. high markups don't always mean big profits. 4. speeding turnover often increases profits because the firm's operating costs are a function of time and the volume of goods sold....
View Full Document
This note was uploaded on 05/09/2011 for the course BUSI 406 taught by Professor Williamperreault during the Spring '11 term at University of North Carolina School of the Arts.
- Spring '11