How does technology help businesses when it enables them to obtain and analyze vast amounts of information that impact the pricing function?
By generating profit-and-loss statements
By deciding how much to spend on advertising
By calculating the cost of hiring more employees
By determining the best time to adjust prices
What might happen if a business's customers feel that they are not getting the most value for their money?
Sales remain the same.
Sales increase.
Customers spend money elsewhere.
Customers purchase more.
What pricing tactic might be considered questionable by some businesses?
Matching the prices of a competitor
Developing a complex pricing structure
Marking up prices to earn a profit
Providing a reference price
Which of the following factors should businesses consider when establishing a product's selling price?
Economic conditions
Unfair sales laws
Pricing agreements
Trade practices
What is an example of an unethical pricing practice?
A company prices its products low in an attempt to drive its competitors out of business.
A business increases its prices when the cost of the materials to make the products increases.
A firm sets a business objective to increase its profit margins over the next five years.
A business prices a new product line to reflect high quality and status.
The Standard Oil Company's price-fixing tactics and monopolistic control over oil refining and distribution in the late 1800's was a major contributing factor in the enactment of which piece of legislation?
Sherman Antitrust Act
Clayton Act
Robinson-Patman Act
Federal Trade Commission Act
Which of the following is an example of an ethical issue as it relates to predatory pricing?
An international book publisher sells similar products to similar customers at different prices.
A tire producer introduces a new item to its product line and sets the initial price very low.
A salesperson encourages a customer to purchase an extended vehicle warranty for a new car.
A local ice-cream shop prices menu items below cost in an effort to eliminate its competition.
What is the advantage to a business of using bar-code pricing?
Easier for customers to read
Reduces required business security
Easier to change prices
Reduces number of employees needed for sales
What is an external factor that affects the price that a business charges for its products?
Operating costs
Variable expenses
Employee benefits
Why do some new companies set their selling prices as low as they can?
To eliminate all possible competition
To get market share as fast as possible
To earn a high return on investment
To quickly make a large profit
Companies A, B, and C sell similar products. Together, they recently decided to sell their products for the same price. In what unethical activity are the businesses engaging?
Bait-and-Switch
Price Fixing
Loss-leader Pricing
Gray Markets
Charging premium prices for lumber to hurricane victims because supply is limited is
unethical and illegal.
unethical and legal.
ethical and legal.
ethical and illegal.
A business charges a small company a higher price for a product than it charges a large company for the same product. What does this represent?
Price Discrimination
Controlled Pricing
Price Competition
Regulated Pricing
Wal-Mart and Sears attract two different types of customers because of their pricing strategies. They have established their prices based on __________ decisions.
promotional
customer
place
profit
What would be the most appropriate pricing strategy for a business in a small town where unemployment has skyrocketed and the economy is in a downturn?
Below-cost pricing
High-level pricing
Odd-cents pricing
Flexible pricing
One way that many businesses use technology to reduce the costs associated with marking prices on products is by using
electronic scanning devices.
automated inventory systems.
preprinted gummed labels.
computer-generated tags.
Technology allows manufacturers to pre-print product packaging with Universal Product Codes (UPCs) which contain __________ information.
pricing
sampling
operating
selling
What costs do businesses usually include in the price of their products?
Regulations
Inflation
Transportation
Orientation
