0324548133_TB_C17

0324548133_TB_C17 - Chapter 17Pricing Concepts TRUE/FALSE 1...

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Chapter 17—Pricing Concepts TRUE/FALSE 1. Price is defined as the perceived value of a good or service that is exchanged for a certain dollar amount. ANS: F Price is not necessarily measured in terms of money. In bartering, other items of value may be exchanged. PTS: 1 REF: 255 OBJ: 17-1 TYPE: Def TOP: 2. Today's firms must develop specific, measurable, and attainable pricing objectives if they hope to survive in highly competitive markets. ANS: T PTS: 1 REF: 256 OBJ: 17-2 TYPE: Comp TOP: 3. A marketers using a profit maximization strategy will charge the highest prices the market will bear. ANS: F Profit maximization means setting prices so that total revenue is as large as possible relative to costs. PTS: 1 REF: 256 OBJ: 17-2 TYPE: Def TOP: 4. Profit maximization is the most common pricing objective used by firms. ANS: F Target return on investment (ROI) is the most common pricing objective used by firms. PTS: 1 REF: 256 OBJ: 17-2 TYPE: Comp TOP: 5. Sales-oriented pricing objectives are either based on market share or dollar or unit sales. ANS: T PTS: 1 REF: 257 OBJ: 17-2 TYPE: Def TOP: 6. Maximization of sales should never be a long-term objective. ANS: T PTS: 1 REF: 258 OBJ: 17-2 TYPE: Comp TOP: 7. Status quo pricing objectives indicate that prices are adjusted to meet the competition. ANS: T PTS: 1 REF: 258 OBJ: 17-2 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Pricing | TB&E Model Strategy
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8. When pricing goals are mainly sales oriented, cost considerations are usually subordinated to demand considerations. ANS: T PTS: 1 REF: 258 OBJ: 17-3 TYPE: Comp TOP: 9. Price equilibrium is the price at which supply and demand are equal, and there is no inclination for prices to rise or fall. ANS: T PTS: 1 REF: 259 OBJ: 17-3 TYPE: Def TOP: 10. If demand for milk is elastic, consumers will not change their purchasing habits greatly when the price of milk changes. ANS: F Elastic demand occurs when consumers are sensitive to price changes. PTS: 1 REF: 259 OBJ: 17-3 TYPE: App TOP: 11. If the formula for elasticity results in a measure of elasticity (E) equal to 1, the increase in sales exactly offsets the decrease in price so that total revenue remains the same. ANS: T
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0324548133_TB_C17 - Chapter 17Pricing Concepts TRUE/FALSE 1...

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