Marketing Price Quiz Questions!

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| By Katie_Liz

Katie_Liz

Community Contributor

Quizzes Created: 1 | Total Attempts: 2,307

Questions: 7 | Attempts: 2,307 | Updated: Mar 21, 2023

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Questions and Answers

1.

Which pricing strategy is where you add a percentage onto what you originally pay for the product?
- A.
  
  Loss Leader Pricing
- B.
  
  Cost Plus Pricing
- C.
  
  Price Skimming
- D.
  
  Penetration Pricing
Correct Answer
B. Cost Plus Pricing

Explanation
Cost Plus Pricing is a pricing strategy where a percentage is added onto the original cost of the product. This allows the company to ensure that they cover their costs and make a profit. By adding a percentage onto the cost, the company can determine the selling price of the product. This strategy is commonly used in industries where the cost of production is known and stable, and the company wants to ensure a consistent profit margin.

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2.

There are two ways of working out cost-plus pricing.
- A.
  
  True
- B.
  
  False
Correct Answer
A. True

Explanation
They are using a mark-up and using a profit margin.

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3.

Which of the following are not pricing strategies?
- A.
  
  Loss Leader Pricing
- B.
  
  Penetration Pricing
- C.
  
  Profit Pricing
- D.
  
  Sales Pricing
Correct Answer(s)
C. Profit Pricing
D. Sales Pricing

Explanation
Profit Pricing and Sales Pricing are not pricing strategies because they are not commonly recognized or used as specific pricing strategies in business. Profit Pricing refers to the general practice of setting prices in order to maximize profits, which is a fundamental goal of any pricing strategy. Sales Pricing, on the other hand, is a vague term that could refer to any type of pricing strategy aimed at increasing sales, such as discount pricing or promotional pricing. However, it is not a specific pricing strategy with well-defined characteristics or principles.

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4.

Which pricing strategies would be appropriate for an established business trying to win customers from competitors?
- A.
  
  Price Skimming
- B.
  
  Penetration Pricing
- C.
  
  Cost Plus Pricing
- D.
  
  Loss Leader Pricing
Correct Answer
D. Loss Leader Pricing

Explanation
Penetration Pricing refers to a new product.
Price Skimming is a strategy that would already be in place.
Cost Plus pricing doesn't take into account what competitors charge.
Competitive Pricing would also work.

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5.

When a product costs £2 for the business to get, does a 25% mark-up equal a 20% profit margin?
- A.
  
  True
- B.
  
  False
Correct Answer
A. True

Explanation
A 25% mark-up means that the product is being sold for 25% more than the cost price, which would be £2 + 25% of £2 = £2 + £0.50 = £2.50. The profit margin is calculated as the profit divided by the selling price, so in this case, the profit margin would be (£2.50 - £2) / £2.50 = £0.50 / £2.50 = 20%. Therefore, a 25% mark-up does equal a 20% profit margin.

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Current Version
Mar 21, 2023

Quiz Edited by
ProProfs Editorial Team
Dec 01, 2014

Quiz Created by
Katie_Liz

Marketing Price Quiz Questions!

Which pricing strategy is where you add a percentage onto what you originally pay for the product?

There are two ways of working out cost-plus pricing.

Which of the following are not pricing strategies?

Which pricing strategies would be appropriate for an established business trying to win customers from competitors?

When a product costs £2 for the business to get, does a 25% mark-up equal a 20% profit margin?