Which of the following is TRUE of alternative long-run pricing approaches?

Question

Quizplus · Accepted Answer

In a competitive market, it is more logical to use a market-based approach because the price is determined by supply and demand forces. A market-based approach considers the reactions of customers and competitors, whereas a cost-based approach only considers production costs. Cost-plus pricing, which is a type of cost-based approach, sets the markup based on production costs and ignores market forces when determining the selling price.

Which of the Following Is TRUE of Alternative Long-Run Pricing