There is relatively little incentive for a service provider to improve its efficiency if it uses cost-plus pricing.

Name: There is relatively little incentive for a service provider to improve its efficiency if it uses cost-plus pricing.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Cost-plus pricing guarantees the service provider a profit over their costs, reducing the motivation to lower costs or improve efficiency since the pricing model allows for the direct pass-through of costs to the customer.

There Is Relatively Little Incentive for a Service Provider to Improve