Which of the following statements is true of cost-based pricing?
A)It determines price by adding a fixed margin to the per-unit cost of the product.
B)It determines the price based on the amount consumers are willing to pay for a product.
C)It is an interesting theoretical approach to pricing, but it is seldom used in the real world.
D)It is obtained by subtracting the desired margin, which yields the target costs.

Question

Quizplus · Accepted Answer

Cost-based pricing determines the price by adding a fixed margin to the per-unit cost of the product. This approach is commonly used in the real world, especially for products with stable costs and competition that does not significantly affect the pricing strategy.

Which of the Following Statements Is True of Cost-Based Pricing