SOLVED

71) Price fixing occurs when two or more companies conspire to ________. A) keep prices at a certain level B) use predatory pricing C) use loss-leader pricing D) use bait-and-switch tactics E) prohibit competitors from entering a market 72) Which of the following occurs when competitors making the same product jointly determine what price each will charge customers for the item? A) horizontal price fixing B) vertical price fixing C) predatory pricing D) internal reference pricing E) assimilation pricing 73) Which of the following occurs when manufacturers or wholesalers attempt to force retailers to charge a certain price for their products? A) horizontal price fixing B) vertical price fixing C) predatory pricing D) internal reference pricing E) assimilation pricing 74) Federal legislation on price-fixing requires that sellers set their prices ________. A) based on their fixed and variable costs B) without communication with competitors C) to achieve a specified profit margin D) consistently with all customers E) consistently throughout a region 75) By using ________, a company deliberately sets a low price with the intention of driving its competition out of business. A) price-fixing B) price lining C) contrast pricing D) predatory pricing E) loss leader pricing 76) When setting prices, a leading manufacturer of nutritional supplements decided to institute a pricing strategy that would support a five percent increase in sales over the next three years. What type of pricing objective has the company set? A) profit B) sales C) competitive effect D) cost-plus E) value 77) When Home Depot stores entered the Canadian market, there were already stores providing similar services and products. To get people to try the Home Depot stores, the chain deliberately sold merchandise below the price that the Canadians were used to. What type of pricing objective did Home Depot use? A) market share B) profit C) competitive effect D) customer satisfaction E) image enhancement 78) Many people rely on a prescription drug to control their cholesterol. An increase in the price of the drug would have little effect on the quantity demanded because there are no substitutes for the drug and because people who take it have no choice but to continue taking it if they wish to stay healthy. The demand for the cholesterol drug is ________. A) elastic B) inelastic C) cross-elastic D) supply-driven E) asymmetrical 79) When Joe’s Coffee Nook raised the price of a latte, Joe noticed a substantial change in how many lattes he sold daily. A price reduction caused his sales to increase. From this information, you can assume the demand for lattes is ________. A) static B) supply-driven C) asymmetrical D) elastic E) inelastic 80) Sellers should know that the less elastic the demand for their product is, the more advantageous it is for them to ________. A) drop the price B) raise the price C) maintain the price D) discontinue the item E) bundle the item with another product