#1
Which of the following is NOT a pricing strategy?
Production Pricing
ExplanationProduction Pricing is not a recognized pricing strategy.
#2
What is the primary objective of penetration pricing?
Capturing market share quickly
ExplanationPenetration pricing aims to quickly gain market share by setting a low initial price.
#3
Which pricing strategy involves setting a high initial price to capture the segment willing to pay a premium price?
Skimming Pricing
ExplanationSkimming Pricing sets a high initial price to attract customers willing to pay a premium.
#4
Which pricing strategy involves setting prices at a level designed to cover costs and generate a target profit?
Cost-Plus Pricing
ExplanationCost-Plus Pricing sets prices to cover costs and achieve a target profit.
#5
What is the main drawback of using psychological pricing?
It may lead to consumer distrust
ExplanationPsychological pricing may create consumer distrust due to perceived manipulation.
#6
Which pricing strategy involves continuously adjusting prices based on market demand and other factors?
Dynamic Pricing
ExplanationDynamic Pricing adjusts prices based on real-time market demand and other factors.
#7
Which of the following is an example of a price skimming strategy?
A company charging premium prices for newly launched products
ExplanationCharging premium prices for newly launched products is an example of price skimming.
#8
In the context of price elasticity of demand, if a 10% increase in price results in a 5% decrease in quantity demanded, what is the price elasticity of demand?
1.0
ExplanationPrice elasticity of demand is 1.0, indicating unitary elasticity.
#9
Which of the following is NOT a determinant of price elasticity of demand?
Price of the product
ExplanationThe price of the product is not a determinant of price elasticity of demand.
#10
Which of the following is a characteristic of inelastic demand?
Consumers are not very responsive to price changes
ExplanationInelastic demand means consumers are less responsive to price changes.
#11
What is the formula for calculating price elasticity of demand?
(Percentage change in quantity demanded) / (Percentage change in price)
ExplanationPrice elasticity of demand formula: (Percentage change in quantity demanded) / (Percentage change in price).
#12
What happens to total revenue if demand is elastic and the price increases?
Total revenue decreases
ExplanationIn elastic demand, total revenue decreases when the price increases.
#13
Which of the following statements is true about price elasticity of demand?
Products with many substitutes tend to have more elastic demand
ExplanationProducts with many substitutes tend to have more elastic demand.