You are the general manager of the machining products division of a diversified manufacturing company in Des Moines, Iowa. You primarily produce machining products for sale to wholesalers around the world. However, you periodically get requests from other divisions in your company to purchase your products. You treat these purchase requests the same as a purchase request from a non-affiliated entity. You sell your machining products to other internal divisions at a price that is equivalent to a market-based cost.
This is an example of which of the following types of business pricing?
A) Freight absorption pricing
B) Uniform geographic pricing
C) Transfer pricing
D) Zone pricing
E) Base-point pricing
Question 2Package shape, graphic design, and certain colors may be used to make a product appear taller than it actually is.
Indicate whether the statement is true or false
Question 3You and a partner are planning to open a dollar discount store in your hometown. You plan to sell the majority of the items in the store for one dollar unit price. You have seen this concept work well in other cities, and you believe the demographics of your hometown are a good fit for this retail concept.
Which of the following types of customers are you expecting to frequent your store?
A) Price-conscious customers
B) Wholesalers
C) Other retailers
D) Prestige-sensitive customers
E) Value-conscious customers
Question 4You are reading the quarterly financial report of one of your competitors. You expected to see their total sales revenue decline because they had a large price increase during the quarter. You were certain that the price increase would lead to an equivalently large decrease in their total sales revenue. To your surprise, their total sales revenue actually increased in the quarter.
Based on this information, which of the following explanations could explain why the competitor's total sales revenue increased?
A) The demand for the company's products is inelastic, so total revenue declines when prices are raised.
B) The demand for the company's products is elastic, so total revenue declines when prices are raised.
C) The demand for the company's products is elastic, so unit sales increase when prices are raised.
D) The demand for the company's products is inelastic, so total sales revenue increases when prices are raised.
E) The demand for the company's products is elastic, so fixed costs increase when prices are raised.
Question 5Desirable product images can be created through the use of colors, design, shapes, and textures in packaging.
Indicate whether the statement is true or false
Question 6When a firm's packages are designed to appear to be quite similar, the firm is using family packaging.
Indicate whether the statement is true or false
Question 7You are a senior sales and marketing analyst for a major retailing firm in Wyoming. The marketing manager just stopped by your office with a very frustrated look on her face. She tells you that she is confused as to why, every time the company raises the sales price of its products, total revenue for the company declines.
Based on this information, which of the following explanations do you give her for why this situation occurs?
A) The demand for the company's products is inelastic, so total revenue declines when prices are raised.
B) The demand for the company's products is elastic, so total revenue declines when prices are raised.
C) The demand for the company's products is elastic, so unit sales increase when prices are raised.
D) The demand for the company's products is inelastic, so unit sales increase when prices are raised.
E) The demand for the company's products is elastic, so fixed costs increase when prices are raised.
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