REVENUE MANAGEMENT PAPER ACTUAL
QUESTIONS AND ANSWERS SET A+
✔✔What is the term used to describe a pricing system in which all customers are
charged the same price at all times?
Demand-based pricing
Value-based pricing
Segmented pricing
Fixed pricing - ✔✔fixed pricing
✔✔What is true for franchised hotel operations in the United States?
Their prices are established by the hotel's brand managers
Their prices are established by the hotel owners
Their prices are established by their franchisers
Their prices are established by
their franchiser advisory committees - ✔✔their prices are established by the hotel's
brand managers
✔✔What is the economic term used to describe the difference between what a
consumer is charged for a product or service and the price that consumer would
willingly pay for it?
Consumer surplus
Consumer rationality
,Buyer's remorse
Value - ✔✔consumer surplus
✔✔What is the relationship between differential pricing and consumer surplus?
Differential pricing is a strategy used by sellers to maximize consumer surplus
Consumer surplus prevents the effective use of differential pricing
Consumer surplus mandates the use of differential pricing
Differential pricing is a strategy used by sellers to minimize consumer surplus -
✔✔differential pricing is a strategy used by sellers to minimize consumer surplus
✔✔Which course of action would be most beneficial to the profit generating ability of a
revenue manager's business?
Consumer surplus is maximized
The majority of any consumer surplus is captured by intermediaries
The majority of any consumer surplus is captured by the business
The majority of any consumer surplus is retained by the business's customers. - ✔✔the
majority of any consumer surplus is captured by the business
✔✔Hottickets.com is a web-based business that buys popular concert tickets in bulk. It
buys the tickets at a low price because it qualifies for group ticket discounts offered by
concert promoters. Hotticket.com then marks up and immediately resells the tickets it
has purchased to interested individuals who visit the Hotticket website. What is the
name of the activity Hottickets.com is engaging in?
Arbitrage
Commoditization
Consumer surplus staging
Articles of trade - ✔✔arbitrage
✔✔What is the purpose of a price fence or barrier?
To determine the optimum price at which to sell a product or service
,To minimize the sale of low priced products or services
To establish the actual amount of available product inventory
To identify who is and who is not eligible for a special pricing offer - ✔✔to identify who
is and who is not eligible for a special pricing offer
✔✔Which differential pricing strategy would in most cases be illegal or unethical if
implemented?
Pricing based on the age of the buyer
Pricing based on the occupation of the buyer
Pricing based on the ethnicity of the buyer
Pricing based upon the location at which the buyer makes a purchase - ✔✔pricing
based on the ethnicity of the buyer
✔✔The use of a formal customer rewards program is an example of what type of
differential pricing strategy?
Pricing based on distribution channel
Pricing based on customer characteristic
Pricing based on product versioning
Pricing based on payment terms - ✔✔pricing based on customer characterstic
✔✔The requirement that a buyer present a coupon at the time of purchase is an
example of what type differential pricing strategy?
Pricing based on distribution channel
Pricing based on customer characteristic
Pricing based on product versioning
Pricing based on payment terms - ✔✔pricing based on customer characteristic
✔✔The premium prices charged for dinner served at the restaurant Le Jules Vernes on
the second level of the Eiffel Tower in Paris, France can be attributed, in part, to which
type of differential pricing strategy?
, Pricing based on location
Pricing based on time
Pricing based on product versioning
Pricing based on bundling - ✔✔pricing based on location
✔✔A business hotel's promotion targeting local area residence and designed to offer
them significantly reduced room rates on Sunday nights is an example of which type of
differential pricing strategy?
Pricing based on location
Pricing based on bundling
Pricing based on product
versioning
Pricing based on time - ✔✔pricing based on time
✔✔Which statement about high volume buyers in the hospitality industry is true?
The costs of selling and servicing their accounts increase proportionately with
the volume of purchases made
They expect to pay more per unit purchased because they buy in large quantity
The per-unit cost of selling to them is less than the cost associated with low
volume buyers
It is easier to win their business than to win the business of low volume buyers - ✔✔the
per-unit cost of selling to them is less than the cost associated with low volume buyers
✔✔Offering reduced room rates only to those room buyers willing to book their
reservations via an internet website is an example of which type of differential pricing
strategy?
Pricing based on location
Pricing based on time
Pricing based on product versioning
Pricing based on distribution channel - ✔✔pricing based on distribution channel
QUESTIONS AND ANSWERS SET A+
✔✔What is the term used to describe a pricing system in which all customers are
charged the same price at all times?
Demand-based pricing
Value-based pricing
Segmented pricing
Fixed pricing - ✔✔fixed pricing
✔✔What is true for franchised hotel operations in the United States?
Their prices are established by the hotel's brand managers
Their prices are established by the hotel owners
Their prices are established by their franchisers
Their prices are established by
their franchiser advisory committees - ✔✔their prices are established by the hotel's
brand managers
✔✔What is the economic term used to describe the difference between what a
consumer is charged for a product or service and the price that consumer would
willingly pay for it?
Consumer surplus
Consumer rationality
,Buyer's remorse
Value - ✔✔consumer surplus
✔✔What is the relationship between differential pricing and consumer surplus?
Differential pricing is a strategy used by sellers to maximize consumer surplus
Consumer surplus prevents the effective use of differential pricing
Consumer surplus mandates the use of differential pricing
Differential pricing is a strategy used by sellers to minimize consumer surplus -
✔✔differential pricing is a strategy used by sellers to minimize consumer surplus
✔✔Which course of action would be most beneficial to the profit generating ability of a
revenue manager's business?
Consumer surplus is maximized
The majority of any consumer surplus is captured by intermediaries
The majority of any consumer surplus is captured by the business
The majority of any consumer surplus is retained by the business's customers. - ✔✔the
majority of any consumer surplus is captured by the business
✔✔Hottickets.com is a web-based business that buys popular concert tickets in bulk. It
buys the tickets at a low price because it qualifies for group ticket discounts offered by
concert promoters. Hotticket.com then marks up and immediately resells the tickets it
has purchased to interested individuals who visit the Hotticket website. What is the
name of the activity Hottickets.com is engaging in?
Arbitrage
Commoditization
Consumer surplus staging
Articles of trade - ✔✔arbitrage
✔✔What is the purpose of a price fence or barrier?
To determine the optimum price at which to sell a product or service
,To minimize the sale of low priced products or services
To establish the actual amount of available product inventory
To identify who is and who is not eligible for a special pricing offer - ✔✔to identify who
is and who is not eligible for a special pricing offer
✔✔Which differential pricing strategy would in most cases be illegal or unethical if
implemented?
Pricing based on the age of the buyer
Pricing based on the occupation of the buyer
Pricing based on the ethnicity of the buyer
Pricing based upon the location at which the buyer makes a purchase - ✔✔pricing
based on the ethnicity of the buyer
✔✔The use of a formal customer rewards program is an example of what type of
differential pricing strategy?
Pricing based on distribution channel
Pricing based on customer characteristic
Pricing based on product versioning
Pricing based on payment terms - ✔✔pricing based on customer characterstic
✔✔The requirement that a buyer present a coupon at the time of purchase is an
example of what type differential pricing strategy?
Pricing based on distribution channel
Pricing based on customer characteristic
Pricing based on product versioning
Pricing based on payment terms - ✔✔pricing based on customer characteristic
✔✔The premium prices charged for dinner served at the restaurant Le Jules Vernes on
the second level of the Eiffel Tower in Paris, France can be attributed, in part, to which
type of differential pricing strategy?
, Pricing based on location
Pricing based on time
Pricing based on product versioning
Pricing based on bundling - ✔✔pricing based on location
✔✔A business hotel's promotion targeting local area residence and designed to offer
them significantly reduced room rates on Sunday nights is an example of which type of
differential pricing strategy?
Pricing based on location
Pricing based on bundling
Pricing based on product
versioning
Pricing based on time - ✔✔pricing based on time
✔✔Which statement about high volume buyers in the hospitality industry is true?
The costs of selling and servicing their accounts increase proportionately with
the volume of purchases made
They expect to pay more per unit purchased because they buy in large quantity
The per-unit cost of selling to them is less than the cost associated with low
volume buyers
It is easier to win their business than to win the business of low volume buyers - ✔✔the
per-unit cost of selling to them is less than the cost associated with low volume buyers
✔✔Offering reduced room rates only to those room buyers willing to book their
reservations via an internet website is an example of which type of differential pricing
strategy?
Pricing based on location
Pricing based on time
Pricing based on product versioning
Pricing based on distribution channel - ✔✔pricing based on distribution channel
