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THEUNIVERSITYOF

NEWSOUTHWALES

AustralianSchoolofBusiness

SchoolofMarketing

MARK1012:MarketingFundamentals
FinalExaminationSession2,2012

Instructions:(Pleasereadtheseinstructionscarefully)

ThisexaminationpaperconsistsofTHREEsections:SectionA(Fillinthegaps);SectionB
(Shortessayquestions)andSectionC(Multiplechoicequestions).IthasSEVENTEEN
(17)printedpagesexcludingthispage.
Printingisdoublesided,checkeachpagecarefully.
Youhavetwo[2]hourstocompletethisexaminationplus10minutesreadingtime.
Readallthequestionscarefullyandanswerallquestionsasinstructed.
Questionsmustbeansweredinink.
WriteallyourMULTIPLECHOICEanswers(SECTIONC)intheGeneralisedAnswerSheet
provided.Notethatthereare50(FIFTY)MultipleChoiceQuestions.
PrintyourfullnameandStudentnumber{z}onthefirstpageofeachbookandsign
UseofUNSWapprovedcalculatorsispermitted.Noothermaterialistobetakeninto
theexaminationroom.
Thispaperaccountsfor40%ofyourcoursegrade(However,itismarkedoutof100).
YoumayNOTretainthispaper.

SECTIONA:FILLINTHEGAPS

(9x2=18marks)

(Pleasewriteyouranswerinthegapsprovidedineachstatement)

Eachofthenine(9)statementsbelowfocusesonaspecificmarketingconcept/tool/idea.
Fillinthegapsusingtheappropriateword/phrase

1)

Companieswithmanydifferentproductsorbrandsoftencreatea_____________
managementorganisation;whilecompaniesthatselloneproductlinetomany
differenttypesofmarketswithdifferentneedsandpreferences,tendtoprefera
______________managementorganisation.

2)

Whileresellersaremarketing_____________thatcanhelpanorganisationto
promote,sellanddistributeitsgoodstofinalbuyers,themarketingserviceagencies
arethe______________agenciesthathelptheorganisationtotargetandpromote
itsproductstotherightmarkets.

3)

Studiesinvolvingasmallnumberofindividuals,suchasfocusgroupsorindepth
oneononeinterviews,areknownas____________research.Studiesinvolvingalot
ofpeopleandutilisingstatisticaltoolsandtechniquesareknownas____________
research.

4)

Thedemandforbusinessgoodsisultimately_______________fromthedemandfor
consumergoods.Whendemandis_____________,thisindicatesthatdemandisnot
affectedgreatlybypricechanges.

5)

_______________segmentationdividesamarketintogroupsbasedonsocialclass,
lifestyleorpersonalitycharacteristics._____________segmentation,ontheother
hand,dividesamarketintogroupsaccordingtooccasionswhenbuyersgettheidea
tobuy,makeapurchaseoruseaproduct.

6)

__________productsarecomparedonsuchbasesassuitability,quality,price,and
style;whereas____________haveuniquecharacteristicsoridentificationwith
buyersandarespecificallysoughtbytheconsumer.

7)

Innewproductadoption,_____________helpgettheproductexposure:butare
not typical consumers; the typical consumers are known as the __________
___________.

8)

9)

In ________ strategy the producer promotes the product to wholesalers, the

wholesalers promote to retailers and the retailers promote to consumers;
_________ strategy, on the other hand, calls for spending a lot on advertising and
consumerpromotiontobuildupconsumerdemand.
Salespromotionisa_________termincentivetoencouragepurchaseofaproduct
orservice;_________sellingistheinterpersonalarmofthepromotionmix,used
particularlyincomplexsellingsituationssuchasbusinesstobusinessmarketing.
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SECTIONB:SHORTESSAYQUESTIONS(3x7=21marks)

Therearethreequestionsinthissection.AnsweranyTWOofthesequestionsinthespaces
providedattheendofthissection(i.e.,pp.24).

QuestionB1(Answerbothpartsofthequestion)

a. A farmer sells strawberries grown on his/her farm directly to consumers. What is this
channelcalled?Listthreeadvantagesofthischannel.
b. Whatpricingobjectiveswouldyourecommendaretailerofprestigeproductsset?Why?

QuestionB2

Discusstwowaysexplaininghowdistributionchannelscancreateefficienciesandprovide
anexampleofeach.

QuestionB3
A company has developed an innovative product. What pricing strategies are available to
thiscompany?Explainoneoftheavailablestrategiesmentioningtheconditionsthatmust
bemetforthestrategytowork.

Writeyouranswerstothe2selectedquestionsinthespacesprovidedbelow,clearly
indicatingeachquestionnumber.

AnswertoQuestionNo:___
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AnswertoQuestionNo:___

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___________________________________________________________________________
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SECTIONC:(53Multiplechoicequestions)*(61marks)
AnswerALLquestionsbymarkingtherelevantanswerinpencilontheGeneralisedAnswer
Sheetsupplied.

*Eachofquestions2,7,15,17,20,21,33and47(8questions)isworth2marks;eachof
theremaining45questionsisworth1mark.Thereisnonegativemarking.

Pleasesupplythemostappropriateanswer.

ReadtheMiniCaseAintheboxbelowandanswerquestions14.

Threefriendsdiscusstheirbusinessesoveraregularmorningcoffeecatchup.Johnreports
thathehasrecentlyplacedanadvertisementinWomen'sDaysincehethinkshiscustomers
willbemostexposedtoit.Louiscommentswarilythatsheistiredaftertrawlingthrough
600suggestionsforimprovementslipstohelpherdecideoninstoreservicelevels.Evelyn
announcesthatshehasturnedtousingrecycledpackagingbecausereportsshowitwill
benefithercommunity,eventhoughhercustomershavenotexpressedadesireforthis.
Soniaconcedesthatshehashadtodistributeemailstokeyclientstellingthemnottoplace
ordersuntilfurthernoticeforherpremiumcoffeebeansbecauseseverefrostsinAfricahad
reducedsupply.

1)

RefertoMiniCaseA.Whichofthefriendsisengaginginmarketing?
A)
B)
C)
D)
E)

2)

Louisonly.
Johnonly.
JohnandLouis.
Evelyn,Louis,John.
Allofthem.

RefertoMiniCaseA.WhileSonia'sactionsrepresent____________Evelynsactions
represent______________

A)
B)
C)
D)
E)

3)

demarketing;thesocietalmarketingconcept
crisisresolution;goodpublicrelations,
responsetocustomerneeds;theproductconcept
societalmarketing;themarketingconcept
demandmanagement;socialwork

RefertoMiniCaseA.WhichofthefollowingcommentsaboutLouisisclosesttothe
truth?

A)
B)
C)
D)
E)

Sheshouldn'twastehertimewithtwominutesurveys.
Sheneedstoinvestmoneyinprofessionalmarketresearchservices.
Sheisoveranalysingasmalldecision.
Sheisengaginginmarketingmanagement.
Sheisengagingfullyintheproductconcept.
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4)

RefertoMiniCaseA.GivenJohn'scommentheneedsto:
A)

monitorthesuccessofhispromotionandthenlookintomoreprestigious
magazinesthatcanconferqualityonhisproduct.
B) monitorthesuccessofhispromotion.
C) focuslessonpromotionasitreallyisaminorpartofthebroadermarketing
managementprocess.
D) engageinmarketingmanagement.
E) startthinkinglikeamarketer.

5)

Theprocessofmatchinganorganisationsgoalsandcapabilitieswithchangingmarket
opportunitiesisknownas:

A)
B)
C)
D)
E)

strategy.
strategicmatching.
strategicfit.
strategiclinkage.
planning.

ReadtheMiniCaseBintheboxbelowandanswerquestions68.

MiniCaseB:Lennyisputtingtogetheraplanwhichcoversallofthefunctionsofhis
business.Borisiswritinghisplanspecificallytoacquireandmaintaincustomers.Lola,the
CEOofalargeMNChasjustfinalisedtheobjectivesforherportfolioofbusinesses.Sonia
worksforLolaandhasbeengiventheautonomytowriteamissionstatementandset
marketingobjectivesfortheteamshemanages.

6) RefertoMiniCaseB.Giventheevidence,Soniaislikelytomanagea:

A) grocerystore.
B) salesteam.
C) SBU.
D) BUS.
E) strategicentity.

7) RefertoMiniCaseB.Lennyiscurrentlyinvolvedinwritinga________;whileBorisis
writinga_________

A) businessplan;marketingplan
B) marketingplan;businessplan
C) strategicplan;marketingplan
D) functionalplan;businessplan
E) buildingplan;strategicplan

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8)

RefertoMiniCaseB.Lolaisdevelopingher:

A)
B)
C)
D)
E)

managementstrategy.
corporatestrategy.
marketingstrategy.
businessplanstrategy.
portfoliostrategy.

ReadMiniCaseCboxedbelowandanswerquestions913.

MiniCaseC:Themarketingmanagerofanationalbrandofflavouredmilksisconsidering
hermicroandmacroenvironmentinordertocompletethesituationanalysisforthisyears
marketingplan.Shenotessomekeypoints.Smalltradersarenotconsistentlyaffording
appropriatefridgespacetoflavouredmilks.Energydrinksarecontinuingtoholdfavourin
theteenmarket.Youngadultsaged1825aremoreconservativethantheirslightlyolder
cohortaged2535.UHTorlonglifemilkhasprogressedtothepointwheretastetestsshow
littlenoticeabledifference.

9) RefertoMiniCaseC.TheSWOTanalysisisthetooloftenusedtoconductasituation
analysis.Whatpart(s)oftheSWOTacronymarerelevanttothemacroenvironment?

A)
B)
C)
D)
E)

SW
ST
SWOT
OT
OW

10) InMiniCaseCabove,thefridgespaceproblemrepresentsa__________

A)
B)
C)
D)
E)

microenvironmentweakness.
macroenvironmentweakness.
technologicalenvironment.
macroenvironmentthreat.
microenvironmentthreat.

11) RefertoMiniCaseC.Theproductconcernedisconsideredinsomestatesan
Australianicon.Giventhis,whichofthekeypointslistedhasthecleareststrategic
implications?

A)

Smalltradersarenotconsistentlyaffordingappropriatefridgespaceto
flavouredmilks.
B) Energydrinksarecontinuingtoholdfavourintheteenmarket.
C) Youngadultsaged1825aremoreconservativethantheirslightlyoldercohort
aged2535.
D) UHTorlonglifemilkhasprogressedtothepointwheretastetestsshowlittle
noticeabledifference.
E) StatementsBandCabove
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12) RefertoMiniCaseC.Whatwouldbethemostlogicalstrategicimplicationsforthe
prominenceofenergydrinksintheteenmarket?

A) Reducetheresourceallocationaimedatmarketingtowardthisgroup.
B) Promotethebrandasbeinghighinenergy.
C) Identifyopinionleadersamongstthisgroupandprovidethemwithfreeproduct.
D) Identifyfavouredcelebritiesandhavethemendorsetheproduct.
E) Allarefeasible.

13) RefertoMiniCaseC.Havinglonglifemilkmeanstheproductcanstaylongerinthe
fridgebeforehavingtobereplaced.Themainbenefitofthisistothefirmwhichcan
reduceproductionanddistributioncosts.Thisbenefithasbeenderivedthrough
changesinthe____________

A) technologicalenvironment.
B) economicenvironment.
C) distributionenvironment.
D) physicalenvironment.
E) politicalenvironment.

ReadMiniCaseDboxedbelowandanswerQuestions1416.

MiniCaseD:InthemarketingresearchdepartmentatConsolidatedDiversified,Boris
spendshistimetrackingdownrelevantcensusdata.Soniaoftengatherspreliminary
informationpriortoafullscaleproject.Johnrunsstatisticaltestsonthedatacollected.
Louismeetswithselectedconsumerstodiscussaspectsofthecompany'soffers.Evelynis
thechiefanalystwhodrawsconclusionsforthedepartment'sreports.

14) AccordingtoMiniCaseD,Evelynisinvolvedinwhichstepofthemarketingresearch
process?

A) Definingtheproblemandresearchobjectives
B) Developingtheresearchplan
C) Implementingtheresearchplan
D) Interpretingandreportingthefindings
E) Alloftheabove.

15) AccordingtoMiniCaseD,Louisconducts_________whileSoniaismostlikely
involvedin___________.

A) observationalresearch;experimentalresearch
B) focusgroupinterviewing;exploratoryresearch
C) telephoneinterviewing;samplingresearch
D) experimentalresearch;descriptiveresearch
E) samplingresearch;statisticalresearch

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16) AccordingtoMiniCaseD,Johnsworkwithstatisticsisprobablyusedin__________.

A) Focusgroupinterviewing
B) Sampling
C) Developingstructuredsurveys
D) Exploratoryresearch
E) Alloftheabove.

ReadtheMiniCaseEintheboxbelowandanswerquestions1719.

MiniCaseE:Samlovesbasketballandhepurchasesbasketballbootsthathehasseenin
advertisementsfeaturingLeBronJamesandShaquilleO'Neil.Sarahbuysthesame
toothpastethatherparentsbuy.Andrewislookingtopurchasedentalinsuranceforhis
family.Peterdeliberatelydoesnotwearvisiblebrandsthoughhisclothesaretypically
expensivelabels.

17) RefertoMiniCaseE.Sam'spurchasedecisionhasbeenaffectedbyhis_________;
whileAndrew'spurchaseisprobablyinfluencedby_______

A)
B)
C)
D)
E)

lifestyle;householdtype.
membershipgroup;psychographics
family,hisdentalhygiene
naivety,referencegroup
aspirationalgroup;hisfamilylifecyclestage

18) RefertoMiniCaseE.Sarahissatisfying________needswhenpurchasingthisbrand
oftoothpaste.

A)
B)
C)
D)
E)

physiological
psychological
belonging
grocery
social

19) RefertoMiniCaseE.Whichofthefollowingfactorsthatinfluenceconsumer
behaviourwouldbestexplainPetersbehaviour?

A) Learningandoccupation
B) Consumerlifestyleandperception
C) Cultureandhouseholdtype
D) Socialclassandselfconcept
E) Marketingmix

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ReadtheMiniCaseFintheboxbelowandanswerquestions2022.

MiniCaseF:Peterhasjustdecidedonthesegmenttotargetforhiscompaniesnew
offering.Hehasmadeachecklisttohelpfinalisehisdecision:(1)hehasdeterminedthat
theidealsegmentprofileismeasurablewithinNewZealand,(2)hehasdeterminedwhere
theyliveandshopsaswellaswhatmediatheyareexposedto,(3)heknowsthat,ifthis
marketspotentialisrealised,itwouldmorethantriplehiscurrentsales,and(4)hehasthe
resourcesandconnectionstogettheproducttothismarket.

20) RefertoMiniCaseF.ThefirstandseconditemsonPeterschecklistrepresentthe
marketsegments_______________and______________,respectively.

A) potential,identification
B) growth,behaviouralintentions
C) measurability,accessibility
D) identification,lifestyle
E) accessibility,measurability

21) RefertoMiniCaseF.ThethirdandthefourthitemsonPeter'schecklistrepresentthe
marketsegments____________and_____________,respectively.

A) profitability,approachability
B) volume,accessibility
C) sustainability,marketingrequirements
D) potential,measurability
E) substantiality,actionability.

22) RefertoMiniCaseF.Peterhasidentifiedanunmetneedinthissegment.Givenhis
evaluationsthusfarheshouldnow_____________

A) confirmthesegmentandproceedwithsettinghisobjectives.
B) identifythesegment'sprofilewithrelevantcriteria.
C) brandtheproductinameaningfulwayforthesegment.
D) implementhismarketingmix.
E) alloftheabove.

23) Theretailpriceofaproductispartofits____________________

A) coredimension.
B) actualdimension.
C) augmenteddimension.
D) pricepromotiondimension.
E) Alloftheabove.

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24) Ronaldwilldrive500kmtobuyanitemforhisElvisPresleymemorabiliacollection.It
ishardtofinditemsassociatedwithPresleybecausetherearesomanycollectorsof
hismemorabilia.Intermsoftheconsumergoodsclassification,Presleymemorabiliais
anexampleofa________good.

A)
B)
C)
D)
E)

convenience
nondurable
specialty
heterogeneousshopping
homogeneousshopping

25) Productlinelength_____________

A)
B)
C)
D)
E)

tendstoshortenovertime.
isdeterminedbyproductclassification.
referstothetotalnumberofproductsmanufacturedbyacompany.
isshapedbycompanyobjectives.
isoftenclassifiedintermsofconvenience,shopping,andspecialtygoods.

26) TheWexnerCompanyproducesfourmodelsofmiddlequalitydesks.Wexner'ssales
forcereportedthatseveralaccountshadaskedforalowerpriceddeskandsome
accountsalsoneededatopofthelinedesk.IfWexneraddslowerandhigherquality
deskstoitsproductline,itwillhaveengagedina(n)_____________strategy.

A)
B)
C)
D)
E)

downwardstretch
upwardstretch
linemodernisation
twowaystretch
linefilling

27) Iftheproductmanagerforoneoftheworld'slargestlingeriemanufacturersfoundits
PlaytexbrasweresellingwellanditsBalibrasweresellingslowly,theproduct
managermighttryline________toincreasesalesfortheslowerendoftheproduct
line.

A)
B)
C)
D)
E)

harvesting
featuring
augmentation
modernisation
filling

28) Themostenduringmeaningsofabrandareits:

A)
B)
C)
D)
E)

values,benefits,attributes,andpersonality.
attributesandbenefits.
personality,attributes,andbenefits.
values,culture,andpersonality.
attributes,benefits,andvalues.
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29) Brandequity:

A) istiedcloselytospecificproductlines.
B) mayactuallyhinderthelaunchingofbrandextensions.
C) reducestheamountofproductmanagementeffortacompanyneedstoexpend.
D) iscloselyrelatedtothenumberofcustomerswhoaredevotedtothebrand.
E) willbedestroyedwhentheproduct'smanufacturerlaunchesapremiumpricing
strategy.

30) ThefactthatLouispaidonly$10toseethe11:30amshowingofthenewStarWars
moviewhilethosethatsawthe7pmshowpaid$16isanexampleofastrategyfor
dealingwiththe________characteristicofservices.

A) intangibility
B) variability
C) inconsistency
D) inseparability
E) perishability

31) Whichofthefollowingis(are)nottrueabouttheproductlifecycle[PLC]concept?

A) PLCisasoundtheorythatdescribesindustrysalesandprofitsforaproductidea
acrossproductmarkets.
B) PLCisareliablepredictorofaproductssalesgrowthratesandprofitability.
C) bothAandBareuntrueaboutPLC.
D) PLCisausefultoolforpredictingprofitoverthelifeofaproductandameansof
settingmarketingbudgets.
E) PLCisbroadlycorrectindescribingsalestrendsovertime.

32) Thetrendtoshorterproductlifecyclesmeansthat______________

A) globalmarketingmaybetheonlywaytoachieveaprofitbeforetheproduct
becomesobsolete.
B) manufacturerswillinnovatemorebecausetheycanexpecttoseequicker
profits.
C) costsofgettingaproductupandrunningaredecreasing.
D) patentprotectionisofferingadequateprotectiontoinnovators.
E) evenasmallmarketcanbeprofitableforaninnovator.

33) Acurrentlyacceptedorpopularstyleisa(n)________,whileanideathatis
fashionableonlywithacertaingroupofenthusiastsisa(n)_________.

A) fad,fashion
B)
fashion,fad
C)
craze,trend
D) assortment,craze
E)
craze,fashion
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34) Whenafirmattemptstoevaluateanewproductanditsmarketingprogramina
settingthatapproximatesthefuturecompetitiveenvironment,thefirmengagesin:

A)
B)
C)
D)
E)

businessanalysis.
concepttesting.
strategicmarketing
testmarketing.
alloftheabove.

35) __________ is/are part of effective marketing communications because they make
statementsaboutthenatureoftheproductandtheimageitintendstoconvey.

A)
B)
C)
D)
E)

Thepackageinwhichtheproductcomes
Thepriceoftheproduct
Thetypeofretailoutletwheretheproductisavailable
AandB
A,B,andC

36) ThehierarchyofeffectsincludesallofthefollowingEXCEPT__________.

A)
B)
C)
D)
E)

demand
knowledge
awareness
purchase
loyalty

37) Which of the following statements about the percentageofsales method of

budgetingistrue?

A)
B)
C)
D)
E)

Thismethodimpliesthatsalesareanoutcomeofproduction.
The percentageofsales method is the least used bottomup method for
budgeting.
Thismethodimpliesthatsalescausepromotionaloutlays.
Firmsusingthismethodareinclinedtospendmoreonpromotionwhenrevenue
decreases.
Thepercentageofsalesmethodistheonlytopdownbudgetingmethodusedto
determinepromotionalbudgets.

38) Asmallcarmanufacturerislaunchinganadvertisingcampaign,foritsnewmodel,
whichwillrunforeightweeks.Inweeksthreetosixthenew30secondtelevisionads
arerun,intermittentlywithshortened15secondversions.Thefocusoftheadsison
thetargetmarketsdesiredfeatures,classicdesignandsafety.Atthisstagethe
companyislikelytobetryingtoachievewhichobjectives(s)?

A)
B)
C)
D)
E)

AwarenessandKnowledge
LikingandPreference
PreferenceandConviction
ConvictionandPurchase
Purchase
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39) Everyadvertisementandeveryadvertisingcampaignshould_____________.

A) haveabalancedmixofaestheticandemotionalappeals
B)
featureanattractivepersonalitysuchassportingheroesandfamousfilm/TV
personalities
C)
considerpossiblecompetitorresponseandbroadbasedobjectivessuchas
overallpromotionoftheproduct.
D) pursuespecific,clearlydefinedobjectivesbasedontheorganisationsoverall
marketingandpromotionstrategy
E)
A,BandCabove

40) Publicrelationsisusedto___________

A) lobbygovernmentsinattemptstogetthemtoenactfavourablelegislation
B)
repairdamagetoacorporationsimage,e.g.afterproducttamperingextortion
attempts
C)
talkupshareprices
D) communicatewithshareholders
E)
alltheabove

41) Whenmightasalespromotionleadtolongtermadoptionofabrand?

A) Whenthepromotionisextremelyenticing.
B)
Whenthesalespromotionisusedasanextensionofimageadvertising.
C) Whendemandisinelasticfortheproduct.
D) Whendemandiselasticfortheproduct.
E) Whenthesalepromotionissupportedbyonlinemarketing.

42) Logisticsisamatterof_______________

A) tradeoffsbetweencostareassuchastransportversusproductionlotquantity
costs.
B) ensuringthatleastcostphysicaldistributionisachieved.
C) makingincreasedsalesandthentransportingthematoptimalcosts.
D) reducingthenumberofwarehousescompaniesuse.
E) alloftheabove.

43) Effectivemarketinglogisticsnetworkmanagementcan____________

A) providecostadvantages.
B) providedeliverytimeadvantages.
C) lowerpricestothefinalcustomer.
D) improveprofitsforsuppliersandmanufacturers.
E) doeverythingstatedabove(i.e.,inA,B,C&D).

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44) Whichofthefollowingfunctionsdomembersofthemarketingchanneltypically
performastheymovemerchandisefromoneleveltothenext?

A) Thecreationofformutility.
B) Activitiesbasedcostaccounting.
C) Risktaking.
D) Lengtheningthechannelsoastoprovidemorespecialisedservice.
E) Eliminatingunnecessarychannelfunctions.

45) Whichofthefollowingmarketingchannelsislikelytorepresenttheconsumer
marketingchannelbehindDymock'sonlinebookstore?

A) Manufacturertoconsumer.
B) Wholesalertoconsumer.
C) Retailertoconsumer.
D) Manufacturertoretailertoconsumer.
E) Noneofthese.

46) Twoormoreunrelatedcompaniesatonechannelleveljointogethertopursueanew
marketingopportunityin_____________

A) verticalmarketing.
B) anadministeredVMN.
C) homogeneousmarketing.
D) horizontalmarketing.
E) partnershipmarketing.

47) IBMhaslongbeenperceivedastheleaderincomputertechnology.Assuch,formany
yearsIBMcomputerswereavailableonlyfromselected,authorizedIBMretailers.
Currently,IBMhaschangeditsdistributionstrategy.Consumerscannowpurchase
IBMcomputersatseveralwellknowndepartmentanddiscountstores,includingWal
MartandKMart,locatedthroughoutthecountry.Initially,IBMemployed
__________distributionandmadeitsproductsavailableonlythroughasingleretail
outletinspecificlocations.Currently,ascomputershavebecomemoreofashopping
good,IBMisusing__________distribution,asitseekstobroadenthedegreeofits
distributionandmakeitscomputersavailableinseveralretailoutletsinspecificareas.

A) intensive;exclusive
B) exclusive;intensive
C) intensive;selective
D) selective;exclusive
E) exclusive;selective

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48)

Whendemandis__________,increasesinpriceresultinincreasesintotalrevenues
whiledecreasesinpriceresultindecreasesintotalrevenue.

A)
B)
C)
D)
E)

inelastic
supplydriven
flexible
elastic
synergistic

ReadtheMiniCaseGintheboxbelowandanswerquestionsNo.4953.

MiniCaseG:DiamondMachineTechnology[DMT]makesatoolforsharpeningtheblades
ofpruningshearsandglassclippers.Thecompanyhasinvested$250,000indevelopingthis
sharpener.Thistool,whichisaboutthesizeofapieceofchewinggum,costs$3tomake.
Fixedcostsforthesharpeneris$10,000.Thecompanyexpectstosell100,000sharpeners
thisyear.DMTsmarkuponsalesis30percent,anditwantstoearna20percentROI.

Usethespacebelowtheboxforcomputationpurposes.Basedonyourcomputation,
answerquestions4953(nextpage).

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49) RefertoMiniCaseG.Unitcostofthesharpeneris__________.

A) $5.60
B)
$5.50
C)
$3.10
D) $3.00
E)
$2.60

50) RefertoMiniCaseG.Markuppriceforthesharpeneris_____________.

A) $8.00
B)
$4.43
C)
$4.31
D) $3.71
E)
$2.38

51) RefertoMiniCaseG.Thesharpenerstargetreturnpriceis____________.

A) $9.60
B) $5.32
C) $5.17
D) $3.72
E) $3.60

52) RefertoMiniCaseG.ThesharpenersBreakevenunitswithmarkuppriceis
___________.

A) 181818units
B)
41958units
C)
16667units
D) 6993units
E)
notgiveninA,B,CorD

53) RefertoMiniCaseG.ThesharpenersBreakevenunitswithtargetreturnpriceis
___________.

A) 181818units
B) 41958units
C) 16667units
D) 6993units
E) notgiveninA,B,CorD

EndofExam

GoodLuck

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