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.
Question
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.
Solution
The correct answer is:
b. It ensures that the business covers all product costs and earns a profit.
This is because the cost-plus pricing strategy involves calculating the cost of producing a product and then adding a markup to determine the selling price. This ensures that all production costs are covered and that the business makes a profit on each unit sold.
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