Which is NOT a reason why cost-based pricing is so popular?a.It is easy to explain to various stakeholders.b.It captures the full price that customers might be willing to pay for a product.c.It is easy to measure or estimate.d.It simplifies an otherwise complex pricing process.
Question
Which is NOT a reason why cost-based pricing is so popular?a.It is easy to explain to various stakeholders.b.It captures the full price that customers might be willing to pay for a product.c.It is easy to measure or estimate.d.It simplifies an otherwise complex pricing process.
Solution
The option that is NOT a reason why cost-based pricing is so popular is b. It captures the full price that customers might be willing to pay for a product.
Cost-based pricing is a method where the price of a product is determined by adding a profit element on top of the cost of making the product. While it is easy to explain, measure, and simplifies the pricing process, it does not necessarily capture the full price that customers might be willing to pay for a product. This is because it does not take into account the perceived value of the product by the customer, which can often be higher than the cost-based price.
Similar Questions
Analyse one reason why a business might use competitive pricing and not a cost-based pricing method for an existing product.
Fill in the Blank QuestionFill in the blank question. pricing involves setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it.
hich of the following statements concerned with pricing is not true? A. Where an entity is selling a unique product, it will set the price at the maximum amount bearable by the market. B. Some entities may use an average cost that includes both fixed and variable costs for cost-based pricing. C. Cost-based prices are difficult to calculate. D. Market-based pricing is based on competition in the market place.
Explain one reason why the pricing decision is an important one.
The advantage of using the cost-plus pricing strategy is:Select one:a. It removes any costs that do not add value to the product.b. It ensures that the business covers all product costs and earns a profit.c. It considers market and customer informationd. It looks at the relationship between price and quantity demand.
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.