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Entrepreneurship I Unit 5 Test
Terms in this set (50)
Costs to consumers of airline tickets and legal advice are examples of
After a good is produced, the price of that good should be set at a point at which
the good will sell.
The prices of services in a new business are about the same as those of similar businesses in the area. This is an example of pricing that is
Which of the following statements about pricing is true:
The price must satisfy both buyers and sellers.
Business A spends less on advertising than Business B. Both businesses sell the same products, but Business B charges higher prices than Business A. Which of the following factors has affected the prices of the businesses:
Businesses might consider increasing their prices during times when
economic conditions are good.
Large companies that use sophisticated methods for setting the prices of their goods and services often rely on information from
A business priced a new product well below the current market price. Sales were very low because many customers believed the product was of poor quality because of its low price. In this situation, the seller did not set a __________ price.
What pricing strategy would be most effective for a business that wants to create an image of very good quality and prestige?
The price a business sets on a particular product often has an effect on the business's choice of a(n) __________ to promote that item.
Charise is considering how much to charge for her small business's products. Charise is involved in
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
Sellers must carefully set prices so that buyers feel they are receiving __________ value for their money.
What might happen if a business's customers feel that they are not getting the most value for their money?
Customers spend money elsewhere.
Can prices be set too low?
Yes, customers may feel quality is too low.
With what do many customers associate price?
A downturn in the economy has forced a home builder to lower its prices. This company has __________ prices.
A station across the street is offering gasoline for five cents cheaper per gallon. The other stations in the area decide to lower their prices as well. This is an example of __________ pricing.
To set prices, businesses must price the physical product and all of its associated
In which of the following businesses is the business owner usually responsible for setting prices:
Java Joe's Coffee Shop
In which of the following businesses would a separate department most likely be responsible for establishing prices:
A hair care company cannot afford to spend millions of dollars on research for the new, inexpensive shampoo it is developing, so the company must choose a less expensive form of research. This is an example of how pricing affects which of the following elements of the marketing mix:
Which of the following is a product factor that sandwich shops consider when deciding on the price to charge for menu items:
Cost of food
When companies increase the quality of materials used in the production of their products, their prices will tend to be
Can pricing affect a business's image?
Yes, a business with low prices may have a discount image.
A company with a high profit margin decides to advertise with a full-page, high-cost magazine ad. This is an example of how pricing influences
Which area of promotion will pricing affect?
A company decides to save money by shipping its products by truck instead of by plane. Which marketing mix element is pricing influencing in this example?
When Mariah sets prices for her company, she strives to maximize profit, which is considered a(n)
Covering costs is a pricing objective related to
Most sales forecasts are based on past sales performances as well as
expected market conditions.
Which of the following is a potential benefit of sales forecasting:
Which type of sales forecasting is based on expert opinion and personal experience?
Which type of sales forecasting is based on the analysis of hard facts or numerical data?
Which of the following is an example of internal information used for quantitative sales forecasting:
Past sales records
Which of the following is an example of external information used for quantitative sales forecasting:
Which of the following is an advantage of quantitative sales forecasting:
Which of the following is an internal factor that may affect a business's sales forecast:
Length of time to complete sales
How would an inventory shortage likely affect a business's sales forecast?
Predicted sales would be lower.
Which of the following is an external factor that may affect a business's sales forecast:
Which of the following is a true statement regarding how economic conditions may affect a business's sales forecast:
A poor economy will hurt sales for some businesses but will help others.
A business might create a sales forecast to predict future sales for
a specific market segment.
The further into the future a sales forecast reaches, the more __________ it is.
Short-range sales forecasts are used to
aid in day-to-day decision-making.
Intermediate-range sales forecasts are used to
plan yearly budgets.
Long-range sales forecasts are used to
make strategic plans.
For new businesses, sales forecasts are especially vital for
obtaining loans and investments.
Which of the following is a use for sales forecasting in business planning:
Comparing sales to industry norms
How might sales forecasting aid a business in setting prices?
If predicted sales are low, the business might consider lowering prices.
Which of the following is an excuse a business might make for not creating sales forecasts:
It takes too much time.
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