The product strategy in which companies first determine the price at which they can sell a new product and then design a product that can be produced at a low enough cost to provide an adequate profit margin is referred to as _____.
A)full costing
B)target costing
C)predatory pricing
D)discriminatory pricing

Question

Quizplus · Accepted Answer

This product strategy is called target costing. It involves starting with a target price and working backwards to design a product that can be produced at a low enough cost to achieve the desired profit margin. Full costing is a method of accounting for all costs associated with a product or service, including fixed and variable expenses. Predatory pricing is a strategy in which a company sets a very low price for a product with the intention of driving competitors out of business. Discriminatory pricing is a strategy in which different customers are charged different prices for the same product or service based on factors such as their willingness to pay or their location.

The Product Strategy in Which Companies First Determine the Price