B. monopolistic competition.
c. oligopolistic competition.
d. pure monopoly.
25. The type of market in which sellers try to develop differentiated offers for different
customer segments is called:
a. pure competition.
B. monopolistic competition.
c. oligopolistic competition.
d. pure monopoly.
26. The type of market that consists of a few sellers who are highly sensitive to each
other’s pricing and marketing strategies is called:
a. pure competition.
b. monopolistic competition.
C. oligopolistic competition.
d. pure monopoly.
27. The type of market that consists of one seller is called:
a. pure competition.
b. monopolistic competition.
c. oligopolistic competition.
D. pure monopoly.
28. Nonregulated monopolies are free to price at what the market will bear. However,
they do not always charge the full price for a number of reasons. One of those
reasons is the:
a. desire to skim profits is usually low.
B. desire to penetrate the market faster with a low price.
c. fear of global cultural reaction.
d. damage that high pricing does to corporate culture.
29. The _____________ is a curve that shows the number of units the market will buy
in a given time period, at different prices that might be charged.
a. price curve
b. cost curve
c. supply curve
D. demand curve
30. With respect to the demand curve (in the normal case), demand and price are:
a. directly related.
b. parallel.
C. inversely related.
d. related only through “the invisible hand” of the market place.
31. ____________ is a measure of the sensitivity of demand to changes in price.
a. Price sensitivity
b. Price comparability
C. Price elasticity
d. Price response
32. If the demand hardly changes with a small change in price, we can say that the
demand is classified as being:
a. neutral.
b. elastic.
c. kinked.
D. inelastic.
33. If demand is elastic rather than inelastic, sellers will consider:
A. lowering their price.
b. raising their price.
c. acquiring competitors as a means of avoiding price competition.
d. maintaining the status quo.
34. All of the following are considered to be forms of a cost-based approach to pricing
EXCEPT:
a. cost-plus pricing.
b. break-even analysis.
C. going-rate pricing.
d. target profit pricing.
35. Adding a standard markup to the cost of the product refers to:
A. cost-plus pricing.
b. break-even analysis.
c. target profit pricing.
d. perceived-value pricing.
36. Markup pricing remains popular in the marketplace. Which of the following is a
reason for this popularity?
a. Cost-plus pricing favors the best price.
b. Standard markups make the most sense.
C. Cost-plus pricing is fairer to both buyers and sellers.
d. The method focuses on demand as its base.
37. Setting prices to break even on the costs of making and marketing a product or make
the target profit it is seeking is called:
a. cost-plus pricing.
b. perceived-value pricing.
C. break-even pricing.
d. Going-rate pricing.
38. Which of the following would be considered to be one of the major faults of
break-even analysis and target profit pricing?
A. They do not take into account the price-demand relationship.
b. They are very complicated to calculate.
c. There are serious time lags in the calculations.
d. Most managers do not have confidence in the methods.
39. The pricing method that uses the buyer’s point of view regarding the worth of a
product, not the seller’s cost, is called:
a. cost-plus pricing.
B. value-based pricing.
c. break-even pricing.
d. going-rate pricing.
40. When a coffee shop in an airport and a fine restaurant in a luxury hotel charge
different prices for the same meal to customers who find the atmosphere in the hotel
worth the difference in price, we can say that ____________ was being used.
A. value-based pricing
b. cost-plus pricing
c. break-even pricing
d. going-rate pricing