A small business determines the cost of providing a product or service and then adds a given percentage to it based on the level of profit determined to be appropriate.This is called

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Quizplus · Accepted Answer

The described pricing strategy is known as cost-plus pricing, where the cost of providing the product or service is determined and a profit percentage is added to it to arrive at the final price. This approach ensures that the business covers its costs and makes a profit on each sale. Option A (loss leader strategy) involves selling products at a loss to attract customers who will then purchase other items with a higher profit margin. Option B (setting the pricing floor) refers to establishing the minimum price at which a product or service can be sold, typically to prevent price undercutting. Option D (bootstrap marketing) refers to a low-budget approach to marketing, relying on creativity, innovation, and customer engagement.

A Small Business Determines the Cost of Providing a Product