Cost-based pricing assumes that costs
A) will vary with the level of prices.
B) are used to estimate value.
C) are calculated based on historical consumer perceptions of what things should cost.
D) will continue to decrease as production increases.
E) will not vary much for different levels of production.

Question

Quizplus · Accepted Answer

Cost-based pricing assumes that costs will not vary much with different levels of production. This approach is based on the idea that a product's price should cover the cost of producing it, along with a profit margin. Therefore, the price is typically set based on the variable costs associated with the product, such as materials and labor, plus a markup to cover overhead and profit.

Cost-Based Pricing Assumes That Costs