Click on the box next to each answer. Keep track of your own score.

1. A penetration pricing strategy:
   • A. would likely result in a small market share. INCORRECT  
   • B. would likely result in a small margin. CORRECT  
   • C. would likely result in higher competition. INCORRECT  
   • D. would position a product at the high end of the market. INCORRECT  
2. Price skimming:
   • A. keeps prices bouncing just above costs. INCORRECT  
   • B. is a form of price bundling. INCORRECT  
   • C. could make sense if little chance of future competition. CORRECT  
   • D. is a form of competitive pricing. INCORRECT  
3. In a retail setting, a sale tag often includes the original price from which the markdown was made. This is known as a(n):
   • A. reference price. CORRECT  
   • B. price bundling. INCORRECT  
   • C. complementary pricing. INCORRECT  
   • D. price discrimination. INCORRECT  
4. Jane purchased a Lexmark inkjet printer on sale and was surprised to find how low prices were for inkjet printers.  She was even more surprised, however, to find that the price of a pair of ink cartridges was almost as high as the price she paid for the printer.  Lexmark is apparently using:
   • A. a reference pricing strategy. INCORRECT  
   • B. a price bundling strategy. INCORRECT  
   • C. a complimentary pricing strategy. CORRECT  
   • D. a price discrimination strategy. INCORRECT  
5. Microsoft launched its Xbox videogame console at a price of $299, exactly the same price as the market leader, Sony's PlayStation 2.  Microsoft was using a strategy of
   • A. price skimming. INCORRECT  
   • B. penetration pricing. INCORRECT  
   • C. reference pricing. INCORRECT  
   • D. competitive pricing. CORRECT  
6. What a product is worth to someone is known as:
   • A. price. INCORRECT What someone pays for a product is often different from  what it is worth to that person. People are more  likely to buy when a product is priced at less  than it is perceived to be worth.
   • B. cost. INCORRECT Cost is what is invested into making a product or into  a product that is resold at some price.
   • C. value. CORRECT If value is higher than the price paid, the buyer is  probably satisfied; if value is lower than the  price paid, then the buyer is probably  dissatisfied.
   • D. elasticity. INCORRECT