BAC2624 Topic 4

Three major influences on pricing decisions are ________.

• competition, costs, and customers

• competition, demand, and production efficiency

• continuous improvement, customer satisfaction, and supply

• variable costs, fixed costs, and mixed costs

For long-run pricing decisions, using stable prices has the advantage of ________.

• minimizing the need to monitor competitor's prices frequently

• reducing the need to change cost structures frequently

• reducing competition

• helping to build buyer-seller relationships

Which of the following explains the cost-plus approach to pricing decisions?

• arriving at a price for the product based on the competitive pricing prevalent in the market

• arriving at a price based on the perceived value to a customer given the cost of design and added features

• arriving at a price based on the demand and supply trends in the market

• arriving at a price that earns a target return on investment

Which of the following is true of target pricing?

• it is used for short-term pricing decisions.

• it is one form of cost-based pricing.

• a price is an estimate of customers' perceived value of the product.

• a price is calculated by adding a markup component to the cost base.

Which of the following identifies an estimated price customers are willing to pay and then computes the cost to be achieved to earn the desired profit.

• Cost-plus pricing

• Target costing

• Kaizen costing

• Peak-load costing