A major drawback of cost-based pricing is that it:
A) Ignores the full cost of a product
B) Ignores the relationship between customer demand and price
C) Ignores variable costs and includes only fixed costs
D) Can be used only when all costs have been incurred

Question

Quizplus · Accepted Answer

Cost-based pricing ignores the relationship between customer demand and price, which can lead to pricing products too high or too low. Additionally, cost-based pricing may not accurately reflect the actual costs of producing a product.

A Major Drawback of Cost-Based Pricing Is That It