Target pricing is most commonly used by
A) high labor-intensive firms.
B) firms with high excess capacity.
C) capital-intensive firms.
D) leveraged buyouts.

Question

Quizplus · Accepted Answer

Target pricing is most commonly used by capital-intensive firms because these firms need to ensure that the prices of their products cover not only the variable costs but also a portion of the fixed costs associated with their significant investments in capital equipment.

Target Pricing Is Most Commonly Used by