Which pricing strategy involves setting prices based on the costs of production?Select one:a.Market skimming pricingb.Penetration pricingc.Cost-based pricingd.Competitive pricingClear my choice

To answer the question, we need to identify the pricing strategy that involves setting prices based on the costs of production.

The options provided are: a. Market skimming pricing b. Penetration pricing c. Cost-based pricing d. Competitive pricing

To determine the correct answer, we can analyze each option:

a. Market skimming pricing: This strategy involves setting high initial prices to target early adopters and maximize profits. It is not directly related to the costs of production.

b. Penetration pricing: This strategy involves setting low initial prices to quickly gain market share. It is not directly related to the costs of production.

c. Cost-based pricing: This strategy involves setting prices based on the costs of production, including materials, labor, and overhead expenses. It takes into account the expenses incurred in creating the product or service.

d. Competitive pricing: This strategy involves setting prices based on the prices of competitors in the market. It is not directly related to the costs of production.

Based on the analysis, the correct answer is c. Cost-based pricing. This strategy considers the costs of production when setting prices.