Companies often raise their prices by more than the inflationary cost increases as preparation for further inflation or government price controls.This practice is known as ________.
A) anticipatory pricing
B) delayed quotation pricing
C) escalator pricing
D) unbundling
E) discount pricing

Question

Quizplus · Accepted Answer

Anticipatory pricing refers to the practice of raising prices in anticipation of future inflation or government price controls. By raising prices more than the actual cost increase due to inflation, companies can prepare for potential future increases in costs while maintaining their profit margins. This strategy is a way to hedge against future uncertainty and maintain sustainable profitability. Therefore, option A is the correct answer. Option B (delayed quotation pricing) refers to a pricing strategy where a company delays providing a quote to a customer until a later time. Option C (escalator pricing) refers to a pricing strategy where prices are automatically adjusted based on changes in the cost of production. Option D (unbundling) refers to a pricing strategy where a company breaks up a product or service and charges customers separately for each individual component. Option E (discount pricing) refers to a pricing strategy where a company offers lower prices to customers in order to encourage sales.

Companies Often Raise Their Prices by More Than the Inflationary