MGT 103 MIDTERM 2 EXAM QUESTIONS WITH VERIFIED SOLUTIONS LATEST UPDATE 2026
Anchor and Adjustment - Answers first information becomes basis (anchor) from which we adjust
based on new info
$1 each vs 10/$10 (meant to buy more)
Bait and Switch - Answers Bait with a lower price, but then say they don't have it and then substitute
with higher price product
Break Even Point - Answers Fixed Cost / (Price - Variable Costs)
Break-Even Equation - Answers Total Costs = Total Revenue
(Fixed Costs + Variable Costs)
Buyers Expectations on Price - Answers Internal Reference on what they expect to pay
Captive Pricing - Answers buy product low, but sell accessories at a higher price (printers and ink)
Dynamic Pricing - Answers Changes price depending on costs, demand, competition
(Amazon)
Elastic Demand - Answers change in price has bigger effect on demand
(Movie tickets, things that can be substituted)
False Former Price Comparison - Answers Cross out $200
Now $75
(has to be true)
Fixed Costs - Answers do not change because of production
(rent, salary wage)
Fixed-Type Pricing - Answers stays relatively the same
(Chips)
How do you shift demand without shifting price - Answers Decrease quantity sold (scarcity)
Increase quantity (increase desirability and brand image)
Inelastic Demand - Answers change in price has little effect on demand
(gas, electricity, medicine)
(things people can't really live without)
Loss-Leader Pricing - Answers Choose 1 product that stays at a low price to lose money, but to get
them into the door and then buy more
(Costco Chicken)
Odd-Even Pricing - Answers 4.99 vs 5.00
Effects perception of company (.99 cheap/sale)
Penetration - Answers NP
Decreased price to get the large Market share
(Netflix vs blockbuster)
Predatory Pricing - Answers Pricing Product so low to drive out competition
(Walmart and MomnPop shops)
Prestige Pricing - Answers High Pricing to show luxury
Price - Answers any considerations exchanged for ownership for good/service
($, effort, time)
Price Lining Strategy - Answers Multiple products at different prices (extremeness aversion)
(Gold, Platnium, Silver card)
Profit Equation - Answers Revenue - Cost
(Price * Qty sold) - total costs
Profit Point - Answers (Fixed Cost + Desired Profit) / (Price -Variable Costs)
Skimming - Answers NP
Increased price to recoup for R&D costs
(Electronics)
Trial - Answers NP
offer products at a certain amount and increase after time
Variable Costs - Answers Total Costs - Fixed Costs
Fluctuate in proportion of production
(cost of bread flour, hourly wage)
What do you need to take into account when setting price? - Answers Target Market (tutoring in La
Jolla or Oakland)
Purchase Situation/Context (Soda at BK or A's game)
Anchor and Adjustment - Answers first information becomes basis (anchor) from which we adjust
based on new info
$1 each vs 10/$10 (meant to buy more)
Bait and Switch - Answers Bait with a lower price, but then say they don't have it and then substitute
with higher price product
Break Even Point - Answers Fixed Cost / (Price - Variable Costs)
Break-Even Equation - Answers Total Costs = Total Revenue
(Fixed Costs + Variable Costs)
Buyers Expectations on Price - Answers Internal Reference on what they expect to pay
Captive Pricing - Answers buy product low, but sell accessories at a higher price (printers and ink)
Dynamic Pricing - Answers Changes price depending on costs, demand, competition
(Amazon)
Elastic Demand - Answers change in price has bigger effect on demand
(Movie tickets, things that can be substituted)
False Former Price Comparison - Answers Cross out $200
Now $75
(has to be true)
Fixed Costs - Answers do not change because of production
(rent, salary wage)
Fixed-Type Pricing - Answers stays relatively the same
(Chips)
How do you shift demand without shifting price - Answers Decrease quantity sold (scarcity)
Increase quantity (increase desirability and brand image)
Inelastic Demand - Answers change in price has little effect on demand
(gas, electricity, medicine)
(things people can't really live without)
Loss-Leader Pricing - Answers Choose 1 product that stays at a low price to lose money, but to get
them into the door and then buy more
(Costco Chicken)
Odd-Even Pricing - Answers 4.99 vs 5.00
Effects perception of company (.99 cheap/sale)
Penetration - Answers NP
Decreased price to get the large Market share
(Netflix vs blockbuster)
Predatory Pricing - Answers Pricing Product so low to drive out competition
(Walmart and MomnPop shops)
Prestige Pricing - Answers High Pricing to show luxury
Price - Answers any considerations exchanged for ownership for good/service
($, effort, time)
Price Lining Strategy - Answers Multiple products at different prices (extremeness aversion)
(Gold, Platnium, Silver card)
Profit Equation - Answers Revenue - Cost
(Price * Qty sold) - total costs
Profit Point - Answers (Fixed Cost + Desired Profit) / (Price -Variable Costs)
Skimming - Answers NP
Increased price to recoup for R&D costs
(Electronics)
Trial - Answers NP
offer products at a certain amount and increase after time
Variable Costs - Answers Total Costs - Fixed Costs
Fluctuate in proportion of production
(cost of bread flour, hourly wage)
What do you need to take into account when setting price? - Answers Target Market (tutoring in La
Jolla or Oakland)
Purchase Situation/Context (Soda at BK or A's game)
