Recent Lessons

Show all results for ""

Pricing Method in Business

Choose a study mode

Play Quiz

Study Flashcards

Spaced Repetition

Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the primary basis for determining the price of a product in cost-plus pricing?

Average cost of production (correct)
Market demand
Competitor actions
Desired profit margin

What is the purpose of the mark-up in cost-plus pricing?

To calculate the average cost
To cover production costs
To determine the selling price
To generate profit (correct)

What is a potential limitation of cost-plus pricing?

It does not account for competitor actions
It does not consider the state of the market (correct)
It does not generate enough profit
It is not used by many businesses

What is the main goal of penetration pricing?

To gain market share (C) Signup and view all the answers

What is a benefit of producing on a large scale, as mentioned in the context of penetration pricing?

Achieving internal economies of scale (B) Signup and view all the answers

Which pricing strategy is most effective when demand is price sensitive?

Price penetration (A) Signup and view all the answers

What is the main goal of predatory pricing?

To remove competition and increase prices later (A) Signup and view all the answers

In which situation is a price-skimming strategy most appropriate?

When the firm can protect its idea or invention from competitors (A) Signup and view all the answers

What is the purpose of a loss leader?

To draw customers into the store or website to buy other products (D) Signup and view all the answers

When is a low entry price likely to be beneficial to a business?

When the business can generate high levels of sales and increase revenue (A) Signup and view all the answers

Flashcards are hidden until you start studying