AMA AMA Pricing Strategy & Revenue Management

Question 1

Which pricing strategy sets prices based on the perceived value of the product to the customer rather than on cost?

Accepted Answer

Value-based pricing

Answer

Cost-plus pricing

Answer

Competitive pricing

Answer

Penetration pricing

Question 2

A company launching a new product sets an initially low price to quickly gain market share. This strategy is called:

Accepted Answer

Penetration pricing

Answer

Price skimming

Answer

Premium pricing

Answer

Bundle pricing

Question 3

Price elasticity of demand measures:

Accepted Answer

How sensitive consumer demand is to changes in price

Answer

How production costs change with volume increases

Answer

The difference between cost and selling price

Answer

How quickly competitors respond to price changes

Question 4

Which psychological pricing tactic is exemplified by pricing a product at $9.99 instead of $10.00?

Accepted Answer

Odd-even pricing

Answer

Bundle pricing

Answer

Price anchoring

Answer

Dynamic pricing

Question 5

A price skimming strategy is most appropriate when:

Accepted Answer

Launching a differentiated product to a price-insensitive early adopter segment

Answer

Entering a highly competitive commodity market

Answer

Trying to maximize short-term unit sales volume

Answer

Competing against well-established lower-cost rivals

Question 6

The break-even point in pricing is reached when:

Accepted Answer

Total revenue equals total fixed plus variable costs

Answer

Total revenue equals total variable costs

Answer

Gross margin reaches 50%

Answer

Unit sales exceed the previous quarter's volume