Managers determine what a customer is willing to pay for a product or service under which one of these pricing method?
A) Market-based
B) Cost-based
C) Activity-based
D) Life cycle

Question

Quizplus · Accepted Answer

Market-based pricing is determined by analyzing the prices of similar products or services in the market and setting a price that is competitive and aligned with what the customer is willing to pay. Therefore, it is the most appropriate method for determining a customer's willingness to pay. Cost-based pricing considers the cost of producing a product, which may not necessarily reflect the market demand or value to the customer. Activity-based pricing focuses on the cost of specific activities involved in producing a product, and life cycle pricing considers the different stages of a product's life and adjusts the price accordingly, both of which may not take into account the customer's perspective on price.

Managers Determine What a Customer Is Willing to Pay for a Product