Quiz Chapter 5

What is price determination?

• The process of setting the general level of price for a good or service

• The interaction of demand and supply forces in the market

• The price set by law or regulations

• The comparison of competitive bids

What is the difference between Price Taker and Price Maker?

• Price Taker has control over the price, while Price Maker does not

• Price Taker affects the price of the stock, while Price Maker does not

• Price Taker arises when there are many competitors, while Price Maker occurs in a monopoly market

• Price Taker is willing to accept any price, while Price Maker sets the price

Which price analysis technique involves comparing competitive bids?

• Comparison of Prior Quotations

• Comparison of Published Price

• Comparison of Competitive Bids

• Similar Item Comparison

What is the purpose of a break-even analysis?

• To determine the point at which revenues equal expenses

• To calculate the profit margin of a business

• To set the market price for a product

• To evaluate the performance of suppliers

Which approach to price determination considers competitor prices as a benchmark?

• Cost-based pricing approach

• Market-oriented pricing approach

• Planned-profit pricing approach

• Bid negotiation approach

What is the recommended approach for evaluating bids?

• Narrow down the field by determining which vendors are responsive

• Focus solely on the proposed prices

• Consider only the supplier's past performance

• Compare the total acquisition cost only

When should negotiations be used instead of the bid process?

• When the purchase involves a significant amount of money

• When there is not enough time available to seek competitive bids

• When new technologies or processes are required

• All of the above

Which factor should be considered before determining the price?

• Cost

• Customer demand

• Product positioning

• All of the above

What is the cost-based pricing method that adds a percentage to the production cost?

• Mark-up pricing

• Cost-plus pricing

• Planned-profit pricing

• Bid management pricing

Which approach to price determination ensures a total profit for the business?

• Cost-based pricing approach

• Market-oriented pricing approach

• Planned-profit pricing approach

• Bid negotiation approach