The company designs what it considers to be a good product, totals the expenses of making the product, and sets a price that adds a standard markup to the cost of the product. This approach to pricing is called ________.
A) penetration pricing
B) fixed cost pricing
C) cost-plus pricing
D) variable pricing
E) skimming pricing

Question

Quizplus · Accepted Answer

The approach described in the statement is called cost-plus pricing, where the price is set by adding a markup or profit margin to the cost of the product. Penetration pricing involves setting a low price initially to gain market share. Fixed cost pricing fixes the price based on a predetermined fixed cost. Variable pricing varies the price based on different factors such as demand, supply, and competition. Skimming pricing involves setting a high price initially and lowering it gradually over time.

The Company Designs What It Considers to Be a Good