According To Figure 13-6

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Chapter 13 – In Class Questions and Answers

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Figure 13-7 1. Figure 13-7 shows that by selling 200 pictures the firm will
A. break even.
B. incur a loss.
C. have no fixed costs.
D. earn a profit.
E. have no variable costs. 2. According to Figure 13-7, how much profit will the firm make if it sells 400 pictures?
A. $32,000
B. $35,000
C. $48,000
D. $0
E. $20,000 3. Figure 13-7 shows that by selling 800 pictures the firm will
A. earn a profit.
B. have no variable costs.
C. break even.
D. incur a loss.
E. have no fixed costs. 4. Figure 13-7 is drawn to show that variable costs are smaller than fixed costs when the firm sells
A. 1000 pictures.
B. 1200 pictures.
C. 400 pictures.
D. 900 pictures.
Go to any Dominion supermarket and walk to the cereal aisle. You will notice four brands - Kellogg's, Quaker, General Mills, and Post-seem to occupy most of the shelf space. These cereals are all priced about the same. There is a good deal of product differentiation as the result of licensing agreements that have created a line of Disney cereals and through the use of different health claims. Given this information, you should know the cereal industry is an example of:
A. a pure monopoly.
B. a pure competition.
C. an oligopoly.
D. monopolistic oligopoly.
E. monopolistic competition. 13. If competitive market circumstances are such that there is almost no price competition, no product differentiation, and the only advertising informs prospects the product is available, then ____ must exist in this industry.
A. monopolistic oligopoly
B. pure competition
C. monopolistic competition
D. a pure monopoly
E. an oligopoly 14. Newsweek ran a pricing experiment that involved setting different prices for its magazine in different cities and counting the number of units sold. After adjusting for factors like the population of the different cities, Newsweek could plot these prices and units to result in a:
A. demand
Other things equal, if a firm finds the demand for one of its products is inelastic, it can INCREASE its total revenues by:
A. raising its price.
B. lowering its price.
C. reducing fixed costs.
D. reducing variable costs.
E. reducing both fixed and variable costs. 17. The demand curve for which type of pricing method slopes downward and to the right, then turns back to the left?
A. price lining
B. penetration pricing
C. prestige pricing
D. demand-backward pricing
E. skimming pricing 18. When it comes to low prices in the eyes of consumers, which of the following statements is TRUE?
A. costs will always dictate the price.
B. one price policies are always the best strategy.
C. consumers may not always perceive lower prices as connoting poorer quality.
D. consumers perceive lower prices as poor quality.
E. consumers will pay more for low quality products. 19. _____ is a method of pricing where price often falls following the reduction of costs associated with the firm's producing and selling the increased volume of the product.
A. Marginal revenue pricing
B. Experience curve pricing
C. Target return on sales pricing
D. Target return on investment pricing
E. Cost-plus-percentage-of-cost