The price of an item should be
A) based exclusively on break-even analysis.
B) less than what the competition is charging.
C) based on what purchasers are willing to pay.
D) total costs plus a margin of profit.

Question

Quizplus · Accepted Answer

The most effective pricing strategy is to charge what purchasers are willing to pay. This involves research into the target market and understanding their buying habits and preferences. It is not always the same as the total cost of producing the item, and may be higher or lower than what competitors are charging. Break-even analysis and profit margins are also important factors, but they should not be the sole determining factor in pricing an item.

The Price of an Item Should Be