Business Studies Quiz: Marketing Questions
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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
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.
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- 2.
It is the single most important factor affecting the revenue and profits of a firm
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.Rate this question:
- 3.
The_______________ sets the minimum level or the floor price at which the product may be sold.
Explanation
Every firm tries to recover their cost atleastRate this question:
- 4.
The ________________ and the ___________________ sets the upper limit of price, which a buyer would be prepared to pay. Choose two correct options:
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Demand of product
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Utility
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Competetion
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Product cost
Correct Answer(s)
A. Demand of product
A. UtilityExplanation
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.Rate this question:
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- 5.
Between the lower limit and the upper limit where would the price settle down? This is affected by the_____________.
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Demand of product
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Utility
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Competetion
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Product cost
Correct Answer
A. CompetetionExplanation
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.Rate this question:
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- 6.
What are the 3 sub types of Product cost?
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Total cost
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Variable cost
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Fixed cost
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Semi- variable cost
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Upfront cost
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Lower cost
Correct Answer(s)
A. Variable cost
A. Fixed cost
A. Semi- variable costExplanation
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.Rate this question:
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- 7.
If the demand of a product is inelastic, the firm is in a better position to fix high prices.
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True
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False
Correct Answer
A. TrueExplanation
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.Rate this question:
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- 8.
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.
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Equal to
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Less than
Correct Answer
A. Equal toExplanation
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 5000Rate this question:
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- 9.
The price will tend to reach the ___________ in case there is lesser degree of competition.
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Upper limit
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Lower limit
Correct Answer
A. Upper limitExplanation
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.Rate this question:
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- 10.
Government can declare a product as __________________________ and regulate its price.
Correct Answer
essential product
essentialExplanation
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.Rate this question:
- 11.
Apart from profit maximisation, the 3 other pricing objectives of a firm are:-
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Sales maximisation
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Attaining Product Quality Leadership
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Surviving in a Competitive Market
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Obtaining Market Share Leadership
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Fulfillment of social objectives
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Meeting personal objectives
Correct Answer(s)
A. Attaining Product Quality Leadership
A. Surviving in a Competitive Market
A. Obtaining Market Share LeadershipExplanation
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.Rate this question:
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- 12.
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:
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introducing a new product
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While entering a new market
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When competition is less
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When firm is having large amount of funds
Correct Answer(s)
A. introducing a new product
A. While entering a new marketExplanation
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.Rate this question:
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- 13.
Will price set by firm be high or low If a firms objective is to obtain larger share of the market.
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High
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Low
Correct Answer
A. LowExplanation
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.Rate this question:
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- 14.
Will price set by firm be high or low if firm wants to maximise its total profit in the long run.
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High
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Low
Correct Answer
A. LowExplanation
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.Rate this question:
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- 15.
If a company provides facilities like free home delivery and credit facilities , the price set by them will be low.
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True
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False
Correct Answer
A. FalseExplanation
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.Rate this question:
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- 16.
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.
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High
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Low
Correct Answer
A. LowExplanation
If a firm is facing difficulties in surviving in the market due to intense competition or the introduction of a more efficient substitute by a competitor, it is likely to lower its prices. This is because lowering prices can help attract customers and increase demand for their products or services. By offering lower prices, the firm aims to remain competitive and retain its market share, despite the challenges it is facing. Therefore, the correct answer is "Low."Rate this question:
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Current Version
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Mar 22, 2023Quiz Edited by
ProProfs Editorial Team -
Mar 17, 2018Quiz Created by
Mamta Narula
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