Management Information System (MIS) Practice Exam

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Prepare for the Management Information System Test. Boost your knowledge with flashcards and multiple choice questions, each question includes hints and explanations. Be exam-ready today!

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Under which pricing model does a firm pay only when a Web surfer clicks on an advertisement?

Pay-per-refresh
Pay-per-sale
Pay-per-click
Pay-per-conversion

The correct answer is: Pay-per-click

The pricing model where a firm pays only when a web surfer clicks on an advertisement is known as the pay-per-click model. This model is widely used in online advertising as it allows advertisers to pay strictly for the engagement their ads receive. By focusing on clicks rather than impressions, businesses can allocate their marketing budgets more efficiently, ensuring they are only paying for ads that actively draw potential customers’ attention. In contrast to this model, pay-per-refresh entails payments based on how often a web page is refreshed, which does not directly measure user engagement with ads. Pay-per-sale requires payment only when a sale is completed, meaning the focus is on the final transaction rather than initial interest. Pay-per-conversion goes a step further by charging advertisers when a user takes a specific action that leads to a conversion, such as signing up for a newsletter or making a purchase. Each of these models serves different business goals, but only the pay-per-click model is specifically tied to the action of clicking on an advertisement, thus demonstrating immediate interest from the user.