In general, prices should not be based on costs because
A)consumers are cost-conscious.
B)producers rarely know what their costs are.
C)consumers make their purchase decisions based on perceived value.
D)producers need to avoid creating a cost competitive parity debate.
E)customers are always right.

Question

Quizplus · Accepted Answer

Prices should not be based solely on costs because customers make their purchase decisions based on perceived value, rather than just the cost of production. A product's price needs to reflect the value it provides to the customer.

In General, Prices Should Not Be Based on Costs Because