Which cost-based pricing method holds that a product's unit costs predictably decline by 10 to 30 percent each time the firm's production volume doubles?
A)experience curve pricing
B)cost-plus-percentage-of-cost pricing
C)cost-plus-fixed-fee pricing
D)standard markup pricing

Question

Quizplus · Accepted Answer

The cost-based pricing method that holds that a product's unit costs predictably decline by 10 to 30 percent each time the firm's production volume doubles is experience curve pricing. This approach is based on the idea that as the firm gains experience in producing a product, it becomes more efficient and can produce it at a lower cost. Therefore, the unit cost per product decreases with an increase in production volume.

Which Cost-Based Pricing Method Holds That a Product's Unit Costs