MM51 4.01 Study Guide

A buyer is willing to pay $9.99 for a product. If the seller is willing to accept that amount, then $9.99 is the:

• Demand

• Value

• Markdown

• Exchange price

Sellers must carefully set prices so that buyers feel they are receiving __________ value for their money.

• No

• Minimum

• Little

• Optimum

What might happen if a business’s customers feel that they are not getting the most value for their money?

• Sales Increase

• Customers spend money elsewhere

• Customers purchase more

• Sales remain the same

Can prices be set too low?

• Yes, customers may feel quality is too low.

• Yes, customers may feel quality is too high.

• No, the lower the price, the greater the product’s appeal.

• No, the lower the price, the more willing the customer is to buy.

  
  

A downturn in the economy has forced a home builder to lower its prices. This company has __________ prices.

• Realistic

• Flexible

• Competitive

• Inflexible

To set prices, businesses must price the physical product and all of its associated:

• Features

• Services

• Physical Characteristics

• Value

In which of the following businesses is the business owner usually responsible for setting prices:

• Walmart

• Sears

• Java Joe's Coffee Shop

• Macy's

In which of the following businesses would a separate department most likely be responsible for establishing prices:

• Small Business

• Local clothing

• Chain store

• Hair store

Which of the following is a product factor that sandwich shops consider when deciding on the price to charge for menu items:

• Method of delivery

• Amount of adverting

• Cost of food

• Type of decor

When companies increase the quality of materials used in the production of their products, their prices will tend to be:

• Reduced

• The same

• Higher

• Lower