True and False - Principle of Marketing 1. Electricity is an example of a produc

Question

True and False - Principle of Marketing 1. Electricity is an example of a product that is price elastic. T F 2. The major disadvantage of using price competition is that it takes a long time to implement the changes in price. T F 3. The idea behind prestige demand is that many prestige products seem to sell better at a high price than at a low price. TF 4. A customer's interpretation and response to a price depends on what the customer receives from a purchase compared to what he or she gives up to make a purchase. TF 5. Organizational goals have little to do with pricing decisions. TF 6. The more experience the customer has with a product, the more he or she relies on external reference prices. TF 7. Price is a crucial marketing mix component. TF 8. Costs are a major issue when establishing price. TF 9. Price is a major component of the profit equation. TF 10. Total costs are influenced by quantities sold. TF 11. Nonprice competition does not permit unique product features, higher product quality, and customer service. TF 12. Elastic demand is usually a result of the lack of substitute products. TF 13. Rent is usually a fixed cost. TF 14. A seller can change prices quickly in a price-competition situation. TF 15. Pricing whereby the buyer absorbs all or part of the freight costs is freight absorption pricing. TF 16. Product demand usually becomes more elastic over time because more substitutes are found. TF 17. Barter is the oldest form of exchange. TF 18. Sellers using nonprice competition are not concerned with prices charged by competitors. TF 19. Nonprice competition allows a company to increase its brand's unit sales through means other than changing the brand's price. TF 20. A firm can survive in the long run only if its products are sold below cost. TF 21. Producers commonly provide discounts off list prices to intermediaries. 22. The legality of uniform geographic pricing has been challenged, and so its use has been abandoned.TF 23. With prestige products, a firm will always be able to sell more at a higher price.TF 24. Seasonal discounts provide price incentives to customers during peak selling seasons. 25. Price is the value that is exchanged for products in a marketing transaction.

Explanation / Answer

1.

Correct Answer:

False

Explanation:

Electricity is a necessity product that is consumed in a required amount irrespective of the price being charged for it. Thus, demand of electricity is inelastic in nature. It is the primary reason that electricity distribution is regulated and/ or controlled by states in most of the nations.

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