On average,if demand is unknown and costs of underpricing are _______ than the costs of overpricing,then err on the side of_________.
A)Smaller;overpricing
B)Smaller;underpricing
C)Larger;underpricing
D)None of the above

Question

​On average,if demand is unknown and costs of underpricing are _______ than the costs of overpricing,then err on the side of_________.
A)​Smaller;overpricing
B)Smaller;underpricing
C)Larger;underpricing
D)​None of the above

Quizplus · Accepted Answer

If the costs of underpricing are smaller than the costs of overpricing, it is better to err on the side of underpricing since it results in more sales and revenue. However, if the costs of overpricing are smaller than the costs of underpricing, then it is better to err on the side of overpricing since it results in higher margins and profits.

​On Average,if Demand Is Unknown and Costs of Underpricing Are

On Average,if Demand Is Unknown and Costs of Underpricing Are