The "death spiral" may be a problem when managers use:

Question

Quizplus · Accepted Answer

The death spiral occurs when companies use cost-based pricing, which involves setting prices based on the costs of producing and distributing the product. If costs increase and prices are not adjusted accordingly, the company may lose market share, leading to lower sales volumes and higher costs, which in turn can lead to further price increases and decreased demand. This cycle can continue until the company is no longer competitive and eventually goes out of business. Market-based prices (A) and profit-maximizing prices (C) may be more flexible and responsive to changing market conditions, while regulated prices (D) are set by external forces such as government agencies and are not subject to the same market pressures.

The "Death Spiral" May Be a Problem When Managers Use