You are working for an athletic shoe company that has just developed a shoe that is 40% lighter than any shoe on the market. This shoe is ideal for distance runners, and your company is confident that runners around the world will want to buy the shoe. Based on this information, you suggest that your company charge a higher price than other shoes on the market that is based on which of the following factors?
A) what competitors are charging
B) your cost to produce the product
C) the maximum price customers are willing to pay
D) what competitors are charging.

Question

Quizplus · Accepted Answer

The suggested pricing strategy is to charge a higher price based on the maximum price customers are willing to pay for a shoe that is 40% lighter than any shoe on the market and ideal for distance runners. Pricing based on what competitors are charging (A) might not reflect the value of the product, and pricing based on production costs (B) might not take into account the perceived value of the product to customers.

You Are Working for an Athletic Shoe Company That Has