VPS Electrical decides to embark on an aggressive strategy to increase its market share and customer base; their prices will be determined using their price floor, which can be best described as:
A) selling products at a loss for a short period of time.
B) pricing products low in order to generate cash flow.
C) the minimum price that an organisation can charge for its products in order to cover costs.
D) charging a low price in order to attract customers to trial a new product.
E) None of the options listed.

Question

Quizplus · Accepted Answer

describe the principles of pricing based on cost and revenue analysis. Costs establish a price floor, beyond which prices are not sustainable. A price floor is the minimum price an organisation can charge in order to cover its costs.

VPS Electrical Decides to Embark on an Aggressive Strategy to Increase