In spite of its failure to account for customer value or customer demand, cost- plus pricing remains one of the most popular methods of price setting. Which of the following statements BEST accounts for its continued currency?
A) It enables sellers to earn a fair return on investment.
B) Sellers simplify the pricing decision using cost- plus approaches.
C) Sellers are more confident about costs than demand or value.
D) In markets where cost- plus pricing is widely practised, cost- plus results in competitors charging similar prices.
E) All of the above are reasons for the widespread use of cost- plus pricing methods.

Question

Quizplus · Accepted Answer

Cost-plus pricing remains popular because it allows sellers to ensure a return on investment, simplifies the pricing process, is based on more predictable costs rather than uncertain demand or value, and leads to price uniformity among competitors.

In Spite of Its Failure to Account for Customer Value