Companies seeking to make a profit must recover the full costs associated with producing and marketing a service, and then add a margin sufficient to yield a satisfactory profit.This is known as:
A)value-based pricing
B)yield-based pricing
C)marginal-cost pricing
D)cost-based pricing
E)activity-based pricing

Question

Quizplus · Accepted Answer

Cost-based pricing involves recovering the full costs associated with producing and marketing a service and then adding a margin to yield a satisfactory profit. This is often the most common method used by companies seeking to make a profit. The other pricing methods listed (value-based pricing, yield-based pricing, marginal-cost pricing, and activity-based pricing) may also be used but do not necessarily require recovery of all costs in the same way that cost-based pricing does.

Companies Seeking to Make a Profit Must Recover the Full