21.The full price of a product or service includes all of the following EXCEPT 
 
 

A.taxes.

B.shipping.

C.travel costs.

D.the price of alternative products and services.

E.value of the consumer’s time.

Taxes, shipping, travel costs, and the value of the consumer’s time are all elements of the full price of a product.

22.Consumers judge the benefits the product delivers against the ____________ necessary to obtain it. 
 
 

A.monetary cost

B.profit

C.variable cost

D.total return

E.sacrifice

The perceived value of the product considers both the benefits and everything sacrificed to obtain the benefits.

23.Dean runs a woodworking business specializing in kitchen cabinets. He knows there are other firms with top-of-the-line machinery that make better quality cabinets, but he does well and has a constant flow of business. Dean obviously has 
 
 

A.figured out how to produce cheap products.

B.priced his products well.

C.reduced his variable costs by investing in fixed costs.

D.avoided monopolistic competition, and is instead in a market with pure competition.

E.learned how to use status quo pricing.

Dean has evidently priced his products appropriately with regard to consumers’ perceived value of his cabinets.

24.If firms price their products too low, it may 
 
 

A.result in lower costs.

B.create a premium pricing effect.

C.increase contribution per unit.

D.result in inelastic demand.

E.signal poor quality.

A price that is too low may communicate that the product is of poor quality.

25.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 
 
 

A.a sales orientation.

B.fixed costs.

C.cross-price discounts.

D.a target return.

E.high value.

Gerald’s customers care about the quality of his work, and the value received, and they are willing to pay for the quality they seek.

26.Marketers can deliver high value through high or low prices, depending on 
 
 

A.profit contribution per unit.

B.the bundle of benefits the product or service delivers.

C.monopolistic competition.

D.target return pricing that is greater than variable cost per unit.

E.the income effect.

Value can be delivered at a variety of price points, as long as the benefits delivered match the price.

27.Unlike product, promotion, or place, price is the only part of the marketing mix 
 
 

A.that offers the opportunity for an oligopoly.

B.that is subject to gray market manipulation.

C.that leads to competition.

D.that generates revenue.

E.that is determined by the consumer.

Product, promotion, and place generate costs; price generates revenue.

28.Price is often the most challenging of the four Ps to manage, partly because it is often ___________________________ in developing marketing strategies. 
 
 

A.the least important aspect

B.treated as an afterthought

C.calculated by senior consultants

D.difficult to calculate markups

E.the subject of cross-shopping differentiation

Despite the complex considerations when setting prices, pricing is often treated as an afterthought.

29.Historically, prices were 
 
 

A.the center of attention in almost all marketing strategies.

B.analyzed and changed constantly.

C.calculated to minimize contribution per unit.

D.allowed to vary seasonally as cross-shopping tendencies fluctuated.

E.rarely changed except in response to radical shifts in market conditions.

Historically, prices did not change much except in response to major changes in marketing conditions.

30.Chet knows the pro shops selling his golf photography will “keystone” his products. He also knows sales will decline significantly if the retail price is greater than $200. The maximum wholesale price Chet can charge is 
 
 

A.$200.

B.$100.

C.$50.

D.$10.

E.It cannot be determined from this information.

Keystoning refers to selling a product at twice its cost, so to keep price at or below $200, the cost needs to be no higher than $100.