Which of the following statements regarding cost-oriented approaches is most accurate?
A) These methods focus on the demand side of the pricing problem.
B) These methods account for production, marketing, and overhead expenses.
C) Target return on investment is an example of a cost-oriented method.
D) These methods are simple to use because costs predictably decrease with each doubling of production.
E) Cost-oriented approaches are a subcategory of competition-oriented methods.

Question

Quizplus · Accepted Answer

Cost-oriented approaches account for production, marketing, and overhead expenses in order to determine the price of a product or service. They are focused on the cost side of the pricing problem rather than the demand side. Target return on investment is an example of a profit-oriented method, not a cost-oriented method. It is not accurate to say that costs predictably decrease with each doubling of production, as economies of scale can vary depending on the industry and other factors. Cost-oriented approaches are not a subcategory of competition-oriented methods.

Which of the Following Statements Regarding Cost-Oriented Approaches Is Most