Which of the following is explains the cost-plus approach to pricing decisions?
A) arriving at a price for the product based on the competitive pricing prevalent in the market
B) arriving at a price based on the perceived value to a customer given the cost of design and added features
C) arriving at a price based on the demand and supply trends in the market
D) arriving at a price that earns a specific return given the cost of the product

Question

Quizplus · Accepted Answer

The cost-plus approach to pricing decisions involves arriving at a price that earns a specific return given the cost of the product. This approach starts with determining the total cost of producing the product and then adding a markup to cover overhead costs and profits. The price is then set based on this total cost plus markup.

Which of the Following Is Explains the Cost-Plus Approach to Pricing