UCF MAR 3023 EXAM 4 REVIEW (CH. 14 17) QUESTIONS AND ANSWERS 2025
price - (ANSWER)the overall sacrifice a consumer is willing to make to acquire a specific product or
service
successful pricing strategies are built around the _______ __________ _____________ of ___________,
we examine these in detail because each makes a significant contribution to formulating good pricing
policies - (ANSWER)five critical components (the five C's) of pricing
profit oriented - (ANSWER)institute a companywide policy that all products must provide for at least an
18% profit margin to reach a particular profit goal for the firm
sales oriented - (ANSWER)set prices very low to generate new sale an take sales away from competitors,
even if profits suffer
competitor oriented - (ANSWER)to discourage more competitors from entering the market, set prices
very low
customer oriented - (ANSWER)target a market segment of consumers who highly value a particular
product benefit and set prices relatively high
target profit pricing - (ANSWER)implemented when companies have a particular profit goal as their
overriding concern, firms use price to stimulate a certain level of sales at a certain profit per unit
maximizing profits - (ANSWER)this strategy relies primarily on economic theory, a firm identifies the
price where the profits are maximized
target return pricing - (ANSWER)when firms are less concerned with the absolute level of profits and
more interested in the rate at which their profits are generated relative to their investments
competitive parity - (ANSWER)firms set prices that are similar to those of their major competitors
status quo pricing - (ANSWER)changes prices only to meet those of the competition
,UCF MAR 3023 EXAM 4 REVIEW (CH. 14 17) QUESTIONS AND ANSWERS 2025
demand curve - (ANSWER)shows how many units of a product or service consumers will demand during
a specific period of time at different prices
demand curves assume that - (ANSWER)everything other than price and quantity demanded remains
the same
total cost - (ANSWER)the sum of the variable and fixed costs
break even analysis - (ANSWER)a useful technique that enables managers to examine the relationships
among cost, price, revenue, and profit over different levels of production and sales
price elasticity of demand - (ANSWER)measures how changes in a price affect the quantity of product
demanded
elastic - (ANSWER)when the market for a product or service is price sensitive and elasticity is less than -1
inelastic - (ANSWER)when its price elasticity is greater than -1
income effect - (ANSWER)refers to change in the quantity of a product demanded by consumers due to
changes in their income
substitution effect - (ANSWER)consumer's ability to substitute other products for the focal brand
cross-price elasticity - (ANSWER)the percentage change in the quantity of Product A demanded
compared with the percentage change in price in Product B
complementary products - (ANSWER)have a positive relationship, their demand rise and fall together
substitute products - (ANSWER)their relationship is negative, such that a percentage increase in product
A is a percentage decrease in product B
, UCF MAR 3023 EXAM 4 REVIEW (CH. 14 17) QUESTIONS AND ANSWERS 2025
monopoly - (ANSWER)one firm provides the product or service in a particular industry, which results in
less price competition
oligopolistic competition - (ANSWER)only a few firms dominate, firms typically change their prices in
reaction to competition to avoid upsetting an otherwise stable competitive environment
price war - (ANSWER)reactions to prices in oligopolistic markets can result in two or more firms
competing primarily by lowering their prices
predatory pricing - (ANSWER)occurs when a firm sets a very low price for one or more of its products
with the intent of driving its competition out of business, illegal under the sherman antitrust act and
federal trade commission act
monopolistic competition - (ANSWER)when there are many firms competing for customers in a given
market but their products are differentiated
pure competition - (ANSWER)a large number of sellers offer standardized products or commodities that
consumers perceive as substitutable, such as grains, gold, meat, spices, or minerals
channel members - (ANSWER)manufacturers, wholesalers, and retailers, have different perspectives
when it comes to pricing strategies
retailers' cooperative - (ANSWER)such that it helps its members achieve economies of scale by buying as
a group
cost-based pricing method - (ANSWER)determine the final price to charge by starting with the cost,
relevant costs and a profit are added and then this total amount is divided by the total demand
competition-based pricing method - (ANSWER)set their prices to reflect the way they want their
consumers to interpret their own prices relative to competitor's offerings
price - (ANSWER)the overall sacrifice a consumer is willing to make to acquire a specific product or
service
successful pricing strategies are built around the _______ __________ _____________ of ___________,
we examine these in detail because each makes a significant contribution to formulating good pricing
policies - (ANSWER)five critical components (the five C's) of pricing
profit oriented - (ANSWER)institute a companywide policy that all products must provide for at least an
18% profit margin to reach a particular profit goal for the firm
sales oriented - (ANSWER)set prices very low to generate new sale an take sales away from competitors,
even if profits suffer
competitor oriented - (ANSWER)to discourage more competitors from entering the market, set prices
very low
customer oriented - (ANSWER)target a market segment of consumers who highly value a particular
product benefit and set prices relatively high
target profit pricing - (ANSWER)implemented when companies have a particular profit goal as their
overriding concern, firms use price to stimulate a certain level of sales at a certain profit per unit
maximizing profits - (ANSWER)this strategy relies primarily on economic theory, a firm identifies the
price where the profits are maximized
target return pricing - (ANSWER)when firms are less concerned with the absolute level of profits and
more interested in the rate at which their profits are generated relative to their investments
competitive parity - (ANSWER)firms set prices that are similar to those of their major competitors
status quo pricing - (ANSWER)changes prices only to meet those of the competition
,UCF MAR 3023 EXAM 4 REVIEW (CH. 14 17) QUESTIONS AND ANSWERS 2025
demand curve - (ANSWER)shows how many units of a product or service consumers will demand during
a specific period of time at different prices
demand curves assume that - (ANSWER)everything other than price and quantity demanded remains
the same
total cost - (ANSWER)the sum of the variable and fixed costs
break even analysis - (ANSWER)a useful technique that enables managers to examine the relationships
among cost, price, revenue, and profit over different levels of production and sales
price elasticity of demand - (ANSWER)measures how changes in a price affect the quantity of product
demanded
elastic - (ANSWER)when the market for a product or service is price sensitive and elasticity is less than -1
inelastic - (ANSWER)when its price elasticity is greater than -1
income effect - (ANSWER)refers to change in the quantity of a product demanded by consumers due to
changes in their income
substitution effect - (ANSWER)consumer's ability to substitute other products for the focal brand
cross-price elasticity - (ANSWER)the percentage change in the quantity of Product A demanded
compared with the percentage change in price in Product B
complementary products - (ANSWER)have a positive relationship, their demand rise and fall together
substitute products - (ANSWER)their relationship is negative, such that a percentage increase in product
A is a percentage decrease in product B
, UCF MAR 3023 EXAM 4 REVIEW (CH. 14 17) QUESTIONS AND ANSWERS 2025
monopoly - (ANSWER)one firm provides the product or service in a particular industry, which results in
less price competition
oligopolistic competition - (ANSWER)only a few firms dominate, firms typically change their prices in
reaction to competition to avoid upsetting an otherwise stable competitive environment
price war - (ANSWER)reactions to prices in oligopolistic markets can result in two or more firms
competing primarily by lowering their prices
predatory pricing - (ANSWER)occurs when a firm sets a very low price for one or more of its products
with the intent of driving its competition out of business, illegal under the sherman antitrust act and
federal trade commission act
monopolistic competition - (ANSWER)when there are many firms competing for customers in a given
market but their products are differentiated
pure competition - (ANSWER)a large number of sellers offer standardized products or commodities that
consumers perceive as substitutable, such as grains, gold, meat, spices, or minerals
channel members - (ANSWER)manufacturers, wholesalers, and retailers, have different perspectives
when it comes to pricing strategies
retailers' cooperative - (ANSWER)such that it helps its members achieve economies of scale by buying as
a group
cost-based pricing method - (ANSWER)determine the final price to charge by starting with the cost,
relevant costs and a profit are added and then this total amount is divided by the total demand
competition-based pricing method - (ANSWER)set their prices to reflect the way they want their
consumers to interpret their own prices relative to competitor's offerings
