Michael is opening a tire store. He intends to set the price of tires based on determining the total cost of his purchase of one tire and then adding an amount to cover additional costs and profits. Michael is using ___ pricing.
A)cost-based
B)additional markup
C)floor establishment
D)survival

Question

Michael is opening a tire store. He intends to set the price of tires based on determining the total cost of his purchase of one tire and then adding an amount to cover additional costs and profits. Michael is using ___ pricing.​
A)​cost-based
B)​additional markup
C)​floor establishment
D)​survival

Quizplus · Accepted Answer

Michael is determining the price of his tires based on the total cost of his purchase, which is the fundamental concept of cost-based pricing. This approach involves adding a markup to the cost of goods sold to cover additional costs and profits. The other options, including additional markup, floor establishment, and survival pricing, do not capture Michael's pricing methodology adequately.

Michael Is Opening a Tire Store