Los Amigos, a new Mexican restaurant, has set up shop across the street from Hot Tamales and More. Which of the following pricing strategies will Los Amigos likely use?
A) cost-plus
B) competition-based
C) break-even
D) good-value
E) target costing

Question

Quizplus · Accepted Answer

Since Los Amigos is competing directly with Hot Tamales and More, they are likely to use the competition-based pricing strategy, where they set their prices based on what their competitors are charging. This will allow them to remain competitive and attract customers who are looking for affordable Mexican food options.

Los Amigos, a New Mexican Restaurant, Has Set Up Shop