When products in an industry are relatively homogeneous and price is a key purchase consideration,
A) competition-based pricing becomes more important.
B) demand-based pricing dominates pricing decisions.
C) firms tend to use secondary-market pricing.
D) cost-based methods like markup pricing are dominant.
E) customary pricing is often used.

Question

Quizplus · Accepted Answer

When products are relatively homogeneous and price is a key purchase consideration, competition-based pricing becomes more important. This is because customers are likely to compare prices between competitors and choose the option with the lowest price. Firms must therefore set prices based on what their competitors are charging.

When Products in an Industry Are Relatively Homogeneous and Price