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Marketing Final Exam

The second price is 4495 with total revenue of 651775

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Unformatted text preview: . inelastic c. unitary d. symmetrical e. asymmetrical ANS: A The first price is $59.99 with total revenue of $5,399.10; the second price is $44.95 with total revenue of $6,517.75. Therefore, price dropped, and total revenue went up. PTS: 1 REF: 307 KEY: CB&E Model Pricing OBJ: 19-3 TOP: AACSB Analytic MSC: BLOOMS Application 48. Critics claim that bank ATMs take advantage of the _____ of customers who suffer a poverty of time and have a strong need for convenience. a. elasticity of demand b. inelastic demand schedule c. unitary supply and demand d. ROI characteristics e. supply characteristics ANS: B Customers are paying a premium for the convenience of ATM use. PTS: 1 REF: 307 Thinking KEY: CB&E Model Pricing OBJ: 19-3 TOP: AACSB Reflective MSC: BLOOMS Application 49. All of the following factors directly affect the elasticity of demand EXCEPT: a. other uses of a product b. inputs needed to manufacture the product c. availability of substitute goods d. price relative to a consumer’s purchasing power e. product durability ANS: B Inputs at time of manufacture only indirectly affect the demand, if at all. PTS: 1 REF: 308 Thinking KEY: CB&E Model Pricing OBJ: 19-3 TOP: AACSB Reflective MSC: BLOOMS Analysis 50. Which of the following would imply elastic demand? a. Price is low relative to purchasing power b. Nondurable product c. Low inflation rate d. Many substitute products e. All of these choices ANS: D When there are many substitute products, the consumer can easily switch from one product to another, making demand elastic. The other situations make demand inelastic. PTS: 1 REF: 308 OBJ: 19-3 TOP: AACSB Reflective Thinking KEY: CB&E Model Pricing MSC: BLOOMS Analysis 51. The greater the number of different uses for a product, the more _____ demand tends to be. a. elastic b. inelastic c. unitary d. volatile e. stable ANS: A If a product has only one use, the quantity purchased probably will not vary as price varies. PTS: 1 REF: 308 Thinking KEY: CB&E Model Pricing OBJ: 19-3 TOP: AACSB Reflective MSC: BLOOMS Comprehension 52. If a product has high pricing power, this would indicate a situation of: a. unitary demand b. inelastic demand c. elastic demand d. constant demand e. revenue maximization ANS: B A product with high pricing power is said to have inelastic demand. PTS: 1 REF: 308 Thinking KEY: CB&E Model Pricing 53. Yield management systems are used to: a. b. c. d. e. OBJ: 19-3 TOP: AACSB Reflective MSC: BLOOMS Comprehension determine the availability of product substitutes in complex industries that are experiencing rapid change profitably fill unused capacity predict necessary service levels to achieve revenue goals determine whether it is financially more feasible to buy a new product or repair a broken one create elastic demand for low-involvement products ANS: B Yield management systems use complex mathematical software to profitability fill unused capacity by discounting early purchases, limiting early sales at thes...
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