Name: 
 

Chapter Fourteen - Pricing


Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.
 

 1. 
The phenomenon by which there is a range of prices within which demand will not change is called:
a.
The stepped demand curve.
c.
The staggered demand curve.
b.
The sawtooth demand curve.
 

 2. 
Pricing to realise a target return on investment is an example of:
a.
Status-quo oriented pricing.
c.
Sales-orientated pricing.
b.
Profit-orientated pricing.
 

 3. 
A product which depends on the sales of another is called:
a.
A follower product.
c.
An independent product.
b.
A co-dependent product.
 

 4. 
Which of the following is true?
a.
Customers will be less price-sensitive if the search is easy and cheap.
c.
Customers will be less price-sensitive if the search is expensive and difficult.
b.
Customers will be less price-sensitive if switching costs are low.
 

 5. 
What does ABC stand for?
a.
Augmented Buying Criteria.
c.
Activity Based Costing.
b.
Assessment of Best Customers.
 

 6. 
Which of the following is untrue?
a.
Mark-up is calculated on the bought-in price.
c.
Mark-up is bigger than margin.
b.
Margin is calculated on the sold-for price.
 

 7. 
What is the main drawback of cost-plus pricing?
a.
It is hard to calculate.
c.
It is inaccurate.
b.
It ignores the customers.
 

 8. 
Telephone call boxes typically use:
a.
Cost-plus pricing.
c.
Demand pricing.
b.
Customary pricing.
 

 9. 
Calculating prices according to what people will pay is called:
a.
Customary pricing.
c.
Demand pricing.
b.
Cost-plus pricing.
 

 10. 
Calculating prices according to the costs of production is called:
a.
Cost-plus pricing.
c.
Psychological pricing.
b.
Demand pricing.
 

 11. 
Starting out with a high price for a product, then gradually reducing it as demand weakens, is called:
a.
Demand pricing.
c.
Customary pricing.
b.
Skimming.
 

 12. 
What is odd-even pricing?
a.
Setting prices which make an interesting rhythm when spoken.
c.
Setting prices so that the numbers go from odd to even.
b.
Setting prices with a ‘99’ ending.
 

 13. 
‘Happy hour’ is an example of:
a.
Second-market discounting.
c.
Demand pricing.
b.
Odd-even pricing.
 

 14. 
Setting prices well below those of the competition in order to capture a large share of a new market is called:
a.
Competitive pricing.
c.
Penetration pricing.
b.
Skimming.
 

 15. 
Selling goods below the cost of manufacture is called:
a.
Predatory pricing.
c.
Competitive pricing.
b.
Dumping.
 



 
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