COB 300D Final Exam Questions with
Correct Answers
break even Correct Answ_fixed costs / (price per unit - variable cost per unit)
monopoly Correct Answ_one firm controls the market (power lines)
oligopoly Correct Answ_a small # of firms control the market (airlines)
monopolistic competition Correct Answ_many firms selling differentiated products at
different prices (cars, laptops, phones, etc.)
pure competition Correct Answ_many firms selling the same product at the same price (corn)
value based pricing - improvement value Correct Answ_represents an estimate of how much
more (or less) consumers are willing to pay for a product relative to other comparable products
,value based pricing - cost of ownership Correct Answ_determines the total cost of owning
the product over its useful life
Every Day Low Pricing Correct Answ_Company has pricing in between regular and deep
discount pricing at all times
High/Low Pricing Correct Answ_relies on the promotion of sales, during which prices are
temporarily reduced to encourage purchasesattracts two different segments1) those who aren't
price sensitive2) those who wait for low prices
penetration pricing Correct Answ_set the initial price low for the introduction of the new
product or service, builds sales and market share, deters competition
price skimming Correct Answ_having higher pricing for a brand new product
Markdowns Correct Answ_reductions retailers take on the initial selling price of the product
or serviceIntegral component of high/low pricing strategy
, quantity discounts for consumers Correct Answ_size discount, the more you buy the cheaper
the unit costgoal is to encourage consumers ton purchase larger quantities each time they they
buyconsumers are less likely to switch brands
leader pricing Correct Answ_tactic that attempts to build store traffic by aggressively pricing
and advertising a regularly purchased item, often priced at or just above the stores cost
price lining Correct Answ_developing a floor and ceiling for a product line, then having each
product in the line be some where in the price
deceptive reference point Correct Answ_if a seller is going to label a price as a regular price,
the better bureau suggests that at least 50% of the sales have occurred at that price
loss - leader pricing Correct Answ_leader pricing to the extreme of not recovering costs of
the leader product
price fixing Correct Answ_practice of colluding with other firms to control prices
intensive distribution Correct Answ_put them products everywhere (m&ms)
Correct Answers
break even Correct Answ_fixed costs / (price per unit - variable cost per unit)
monopoly Correct Answ_one firm controls the market (power lines)
oligopoly Correct Answ_a small # of firms control the market (airlines)
monopolistic competition Correct Answ_many firms selling differentiated products at
different prices (cars, laptops, phones, etc.)
pure competition Correct Answ_many firms selling the same product at the same price (corn)
value based pricing - improvement value Correct Answ_represents an estimate of how much
more (or less) consumers are willing to pay for a product relative to other comparable products
,value based pricing - cost of ownership Correct Answ_determines the total cost of owning
the product over its useful life
Every Day Low Pricing Correct Answ_Company has pricing in between regular and deep
discount pricing at all times
High/Low Pricing Correct Answ_relies on the promotion of sales, during which prices are
temporarily reduced to encourage purchasesattracts two different segments1) those who aren't
price sensitive2) those who wait for low prices
penetration pricing Correct Answ_set the initial price low for the introduction of the new
product or service, builds sales and market share, deters competition
price skimming Correct Answ_having higher pricing for a brand new product
Markdowns Correct Answ_reductions retailers take on the initial selling price of the product
or serviceIntegral component of high/low pricing strategy
, quantity discounts for consumers Correct Answ_size discount, the more you buy the cheaper
the unit costgoal is to encourage consumers ton purchase larger quantities each time they they
buyconsumers are less likely to switch brands
leader pricing Correct Answ_tactic that attempts to build store traffic by aggressively pricing
and advertising a regularly purchased item, often priced at or just above the stores cost
price lining Correct Answ_developing a floor and ceiling for a product line, then having each
product in the line be some where in the price
deceptive reference point Correct Answ_if a seller is going to label a price as a regular price,
the better bureau suggests that at least 50% of the sales have occurred at that price
loss - leader pricing Correct Answ_leader pricing to the extreme of not recovering costs of
the leader product
price fixing Correct Answ_practice of colluding with other firms to control prices
intensive distribution Correct Answ_put them products everywhere (m&ms)
