Business Studies Quiz: Marketing Questions

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| By Mamta Narula
Mamta Narula, Commerce
Mamta achieved the Gold Award in a website design competition hosted by Give Something Back International (GSBI). Collaborating with students from Littleton High School, Colorado, USA, and Salakhov's Gymnasia, Surgut, Russia, Mamta showcased exceptional creativity in developing a unique website addressing "Teenage Issues."
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  • 1/18 Questions

    If a firm is facing difficulties in surviving in the market because of intense competition or introduction of a more efficient substitute by a competitor, the price charged by it will be.

    • High
    • Low
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About This Quiz

This Business Studies Quiz focuses on key marketing concepts, specifically around pricing strategies. It tests understanding of factors influencing product pricing, including cost, demand, and competition. Essential for learners in business and marketing fields.

Business Studies Quiz: Marketing Questions - Quiz

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  • 2. 

    The price will tend to reach the ___________ in case there is lesser degree of competition.

    • Upper limit

    • Lower limit

    Correct Answer
    A. Upper limit
    Explanation
    When there is a lesser degree of competition, the price of a product or service tends to reach the upper limit. This is because with less competition, companies have more control over pricing and can set higher prices without fear of losing customers to competitors. As a result, the price can increase towards the upper limit, maximizing profits for the company.

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  • 3. 
    If a company provides facilities like free home delivery and credit facilities , the price set by them will be low. - ProProfs

    If a company provides facilities like free home delivery and credit facilities , the price set by them will be low.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    The statement suggests that if a company offers free home delivery and credit facilities, the price set by them will be low. However, this is not necessarily true. While these facilities may attract customers and increase sales, they also incur additional costs for the company. Therefore, the company may set higher prices to cover these expenses and maintain profitability. Hence, the correct answer is false.

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  • 4. 

    The buyer may be ready to pay up to the point where the utility from the product is ______________ the sacrifice made in terms of the price paid.

    • Equal to

    • Less than

    Correct Answer
    A. Equal to
    Explanation
    If you see shoes worth Rupees 5000 . You will buy it if you feel that utility or benefit provided by it is either equal to or more than Rupees 5000

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  • 5. 

    If the demand of a product is inelastic, the firm is in a better position to fix high prices.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    If the demand for a product is inelastic, it means that the quantity demanded does not significantly change in response to changes in price. In this case, the firm can increase the price without experiencing a significant decrease in demand. This gives the firm more flexibility to set higher prices and potentially increase their profits. Therefore, the statement "If the demand of a product is inelastic, the firm is in a better position to fix high prices" is true.

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  • 6. 

    In certain circumstances, the products may be sold at a price, which does not cover all the costs. Choose two circumstances in which this is applicable:

    • introducing a new product

    • While entering a new market

    • When competition is less

    • When firm is having large amount of funds

    Correct Answer(s)
    A. introducing a new product
    A. While entering a new market
    Explanation
    In certain circumstances, such as introducing a new product or entering a new market, it may be necessary to sell products at a price that does not cover all the costs. This is because these situations often involve higher costs for research and development, marketing, and establishing a customer base. By selling at a lower price initially, the company can attract customers and gain market share, with the aim of eventually increasing prices to cover costs and generate profits.

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  • 7. 
    Will price set by firm be high or low if firm wants  to maximise its total profit in the long run. - ProProfs

    Will price set by firm be high or low if firm wants  to maximise its total profit in the long run.

    • High

    • Low

    Correct Answer
    A. Low
    Explanation
    If a firm wants to maximize its total profit in the long run, it will set a low price. This is because setting a low price will attract more customers, leading to increased sales volume. With a higher sales volume, the firm can achieve economies of scale, reduce production costs, and ultimately maximize its total profit.

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  • 8. 
    Will price set by firm be high or low If a firms objective is to obtain larger share of the market. - ProProfs

    Will price set by firm be high or low If a firms objective is to obtain larger share of the market.

    • High

    • Low

    Correct Answer
    A. Low
    Explanation
    If a firm's objective is to obtain a larger share of the market, it is likely to set a low price. By setting a lower price compared to its competitors, the firm can attract more customers and increase its market share. This strategy is known as price competition, where the firm sacrifices profit margins in the short term to gain a larger customer base and potentially higher profits in the long term. Therefore, the correct answer is low.

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  • 9. 
    It is defined as the amount of money paid by a buyer (or received by a seller) in consideration of the purchase of a product or a service - ProProfs

    It is defined as the amount of money paid by a buyer (or received by a seller) in consideration of the purchase of a product or a service

    Correct Answer
    price
    Explanation
    The correct answer is "price" because it refers to the amount of money that a buyer pays or a seller receives in exchange for a product or service. This term is commonly used in economics and business to determine the value of goods and services in a transaction. The price is an essential factor in determining profitability, market demand, and overall business success.

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  • 10. 

    It is the single most important factor affecting the revenue and profits of a firm

    Correct Answer
    Price
    Explanation
    Price is the single most important factor affecting the revenue and profits of a firm because it directly impacts the amount of money that customers are willing to pay for a product or service. Setting the right price is crucial as it determines the level of demand and the company's ability to cover costs and generate profits. A high price may lead to lower sales volume, while a low price may result in reduced profit margins. Therefore, finding the optimal price point that maximizes revenue and profitability is essential for the success of a firm.

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  • 11. 

    Between the lower limit and the upper limit where would the price settle down? This is affected by the_____________.

    • Demand of product

    • Utility

    • Competetion

    • Product cost

    Correct Answer
    A. Competetion
    Explanation
    The price would settle down between the lower limit and the upper limit due to competition. Competition among sellers influences the price of a product as they strive to attract customers and gain an advantage over their competitors. In a competitive market, sellers may lower their prices to attract more customers or match the prices set by their competitors. As a result, the price of a product is influenced by the level of competition in the market.

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  • 12. 

    What are the 3 sub types of Product cost?

    • Total cost

    • Variable cost

    • Fixed cost

    • Semi- variable cost

    • Upfront cost

    • Lower cost

    Correct Answer(s)
    A. Variable cost
    A. Fixed cost
    A. Semi- variable cost
    Explanation
    The three subtypes of product cost are variable cost, fixed cost, and semi-variable cost. Variable cost refers to costs that vary in direct proportion to the level of production or sales, such as raw materials or direct labor. Fixed cost, on the other hand, remains constant regardless of the level of production or sales, such as rent or salaries. Semi-variable cost is a combination of both fixed and variable costs, where a portion remains constant and another portion varies with the level of production or sales.

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  • 13. 

    Government can declare a product as __________________________ and regulate its price.

    Correct Answer(s)
    essential product
    essential
    Explanation
    The government has the authority to declare a product as essential and regulate its price. This means that the government can determine which products are necessary for the well-being of the public and ensure that their prices are fair and affordable. By regulating the price of essential products, the government aims to protect consumers from price gouging and ensure that everyone has access to these necessary goods.

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  • 14. 
    The ________________ and the ___________________ sets the upper limit of price, which a buyer would be prepared to pay. Choose two correct options: - ProProfs

    The ________________ and the ___________________ sets the upper limit of price, which a buyer would be prepared to pay. Choose two correct options:

    • Demand of product

    • Utility

    • Competetion

    • Product cost

    Correct Answer(s)
    A. Demand of product
    A. Utility
    Explanation
    The demand of a product refers to the quantity of that product that consumers are willing and able to purchase at a given price. The higher the demand for a product, the more buyers are willing to pay for it. Utility, on the other hand, refers to the satisfaction or usefulness that a consumer derives from consuming a product. The higher the utility of a product, the more a buyer is willing to pay for it. Therefore, both the demand of the product and the utility it provides to the buyer set the upper limit of price that a buyer would be prepared to pay.

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  • 15. 

    The_______________ sets the minimum level or the floor price at which the product may be sold.

    Correct Answer(s)
    Product cost
    cost
    costs
    Explanation
    Every firm tries to recover their cost atleast

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  • 16. 

    Apart from profit maximisation, the 3 other pricing objectives of a firm are:-

    • Sales maximisation

    • Attaining Product Quality Leadership

    • Surviving in a Competitive Market

    • Obtaining Market Share Leadership

    • Fulfillment of social objectives

    • Meeting personal objectives

    Correct Answer(s)
    A. Attaining Product Quality Leadership
    A. Surviving in a Competitive Market
    A. Obtaining Market Share Leadership
    Explanation
    The correct answer includes three pricing objectives of a firm: Attaining Product Quality Leadership, Surviving in a Competitive Market, and Obtaining Market Share Leadership. These objectives focus on different aspects of the firm's pricing strategy. Attaining Product Quality Leadership aims to position the firm as a leader in terms of product quality, which can attract customers willing to pay a premium. Surviving in a Competitive Market focuses on setting prices that allow the firm to remain competitive and stay in business. Obtaining Market Share Leadership involves setting prices to gain a larger market share compared to competitors. These objectives go beyond profit maximization and highlight the importance of other strategic goals in pricing decisions.

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  • Current Version
  • Mar 22, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Mar 17, 2018
    Quiz Created by
    Mamta Narula
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