Which of the following statements describes a legitimate disadvantage of cost-based pricing?
A)Marginal costs and revenues are difficult to measure.
B)Determining the amount a customer is willing to pay may require sufficient estimation.
C)Customers may not be willing to pay the price determined by the procedure.
D)all of the above

Question

Quizplus · Accepted Answer

While cost-based pricing ensures that a business covers its expenses and generates a profit, it does not take into account the value or perceived value of the product or service to the customer. This means that customers may not be willing to pay the price determined solely by the cost-based pricing procedure, resulting in potential lower sales or profits. Options A and B are not necessarily disadvantages of cost-based pricing, as they are challenges that can be overcome with accurate measurement and estimation techniques.

Which of the Following Statements Describes a Legitimate Disadvantage of Cost-Based