Price And Promotions Quiz

2.

Elastic demand refers to situations in which a change in price creates a change in demand

True
False

Correct Answer

A. True

Explanation

Elastic demand refers to situations where a change in price leads to a significant change in demand. This means that consumers are highly responsive to price changes, and a small increase or decrease in price can result in a large increase or decrease in the quantity demanded. In other words, when demand is elastic, consumers are more likely to adjust their purchasing decisions based on price fluctuations. Therefore, the statement "Elastic demand refers to situations in which a change in price creates a change in demand" is true.

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3.

Promotion is persuasive communication

True
False

Correct Answer

A. True

Explanation

Promotion is a form of communication that aims to persuade or influence individuals to take a desired action, such as purchasing a product or service. Through various promotional tools and techniques, companies use persuasive messages to create awareness, generate interest, and ultimately convince consumers to make a purchase. Therefore, it can be concluded that promotion is indeed a form of persuasive communication.

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4.

A technique that involves setting prices that all end in either odd or even numbers is known as:

Prestige Pricing
Odd-Even Pricing
Multiple-Unit Pricing

Correct Answer

A. Odd-Even Pricing

Explanation

Odd-Even Pricing is a technique that involves setting prices that all end in either odd or even numbers. This strategy is used to create a perception of lower prices by avoiding round numbers. It is believed that odd prices, such as $9.99, appear smaller and more affordable to consumers compared to round prices. On the other hand, even prices, like $10.00, are often associated with quality and prestige. This pricing technique aims to influence consumer behavior and increase sales by manipulating their perception of price.

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5.

Which of the following is not part of the promotional mix

Personal Selling
Advertising
Sales Promotion
Location based customer tracking

Correct Answer

A. Location based customer tracking

Explanation

Location based customer tracking is not part of the promotional mix because it is not a direct promotional tool used to communicate with customers or persuade them to make a purchase. The promotional mix typically includes personal selling, advertising, and sales promotion, which are all active methods of promotion that involve direct communication and persuasion. Location based customer tracking, on the other hand, is a passive method that involves tracking and analyzing customer behavior and data for marketing purposes, but it does not directly communicate with or persuade customers.

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1

6.

Calculate the break-even point for a music CD that costs $12 to make and market and that will be sold for $15. The total quantity that will be sold at that price is 200,000

160,000
2,400,000
500

Correct Answer

A. 160,000

Explanation

The break-even point is the point at which total revenue equals total costs, resulting in neither profit nor loss. In this case, the cost to make and market the music CD is $12, and it will be sold for $15. The break-even point can be calculated by dividing the total costs by the selling price per unit. Therefore, the break-even point is $12 divided by $15, which equals 0.8. To find the quantity at the break-even point, we divide the total quantity sold at that price (200,000) by 0.8, which equals 160,000 units.

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7.

Consumers will buy only so much of a given product, even though the price is low, represent what

Law of diminishing marginal utility
Break-even point
Demand elasticity

Correct Answer

A. Law of diminishing marginal utility

Explanation

The correct answer is law of diminishing marginal utility. This concept states that as a consumer consumes more units of a product, the satisfaction or utility derived from each additional unit decreases. Therefore, even if the price of the product is low, consumers will eventually reach a point where they have obtained enough utility and will not buy any more of the product.

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8.

Bundle pricing refers to price adjustments required because of the location of the customer

True
False

Correct Answer

A. False

Explanation

Bundle pricing refers to offering a group of products or services together at a discounted price. It is not related to price adjustments based on the location of the customer. Therefore, the given statement is false.

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9.

This type of advertising is directed to a targeted group of prospects and customers rather than a mass audience

Institutional promotion
Product promotion
Direct marketing

Correct Answer

A. Direct marketing

Explanation

Direct marketing is the correct answer because it refers to a form of advertising that is specifically aimed at a targeted group of prospects and customers, rather than a mass audience. Unlike institutional promotion, which focuses on promoting the overall image and reputation of a company, or product promotion, which highlights the features and benefits of a specific product, direct marketing aims to directly reach and engage with potential customers on an individual level. This can be done through various channels such as direct mail, email marketing, telemarketing, or targeted online advertising.

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1

10.

There are 7 steps in determining prices

True
False

Correct Answer

A. False

Explanation

The statement that there are 7 steps in determining prices is false. The question is asking whether the statement is true or false, and the correct answer is false. This means that there are not 7 steps in determining prices.

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Price And Promotions Quiz

Which of the following is a factor the affects prices

Quiz Preview

Elastic demand refers to situations in which a change in price creates a change in demand

Promotion is persuasive communication

A technique that involves setting prices that all end in either odd or even numbers is known as:

Which of the following is not part of the promotional mix

Calculate the break-even point for a music CD that costs $12 to make and market and that will be sold for $15. The total quantity that will be sold at that price is 200,000

Consumers will buy only so much of a given product, even though the price is low, represent what

Bundle pricing refers to price adjustments required because of the location of the customer

This type of advertising is directed to a targeted group of prospects and customers rather than a mass audience

There are 7 steps in determining prices