The amount of a markup percentage that customers are willing to pay is usually higher when which of the following conditions exist?
A) there is idle capacity
B) demand is strong
C) competition is intense
D) demand is elastic

Question

Quizplus · Accepted Answer

Customers are usually willing to pay a higher markup percentage when demand is strong because they value the product or service more and are willing to pay a premium for it. In contrast, when demand is low or elastic, they may be more likely to switch to a cheaper alternative, and any markup percentage is more likely to be viewed as a deterrent to purchase. The other options do not necessarily have a consistent relationship with the willingness to pay a markup percentage. For example, idle capacity may result in lower prices due to the need to fill capacity, while intense competition may lead to competitive pricing strategies.

The Amount of a Markup Percentage That Customers Are Willing