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___________________ are costs that remain constant as the volume of production increases or decreases.

fixed costs

If the price for a product increases, the demand for a substitute product will:

increase

In general, prices should not be based on costs because consumers make their purchase decisions based on perceived value, not the cost of production.

True

Naomi tells her sales representatives the goal is to generate at least a 20 percent return on investment for all of the industrial building supplies they sell. Naomi is using a _______________ pricing strategy.

target return

consumers judge the benefits the product delivers against the ______________ necessary to obtain it.

sacrifice

Slotting allowances are used to get retailers to feature a manufacturer's product in their advertising and promotional efforts.

False

A reference price is:

the price against which buyers compare the actual selling price.

One of the benefits of offering a size discount to consumers is they will purchase more of a marketer's product and:

they will be less likely to switch brands.

Gerald has a number of customers for his lawn care service who never question his bill but expect their lawns to be perfect. These customers do not want low prices, they want:

high value

Near the end of the summer season, Smitty found he still has a large inventory of bathing suits. He needs to sell them rather than hold them over to the next season when color and styles may have changed. He plans to offer them at 30 percent off the retail price. Smitty hopes that demand for bathing suits at the end of the season is:

price elastic

_________________ measures consumers' sensitivity to price changes.

Price elasticity of demand

_______________ is the practice of colluding with other firms to control prices.

Price fixing

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