Executives at Dawson Manufacturing, an MNE, are considering the implementation of a market pricing policy. Which of the following is NOT a potential risk to Dawson of this type of policy?

Question

Quizplus · Accepted Answer

The inability to assess marginal costs would not be a risk of implementing a market pricing policy, as this policy is based on the principle of setting prices according to market forces rather than calculating costs. The other three options are potential risks of this policy. A damage to the firm's brand name can occur if the pricing policy is perceived as unfair or unethical; the development of a gray market can happen when customers or distributors benefit from price differences between markets; and complaints about dumping can arise if the firm's prices are lower than the costs of production, creating a trade distortion.

Executives at Dawson Manufacturing, an MNE, Are Considering the Implementation