Where managers use cost information about outputs to guide pricing decisions,they are likely to __________ outputs that they have under-costed,resulting in increased demand for these outputs while profit will fall.

Question

Quizplus · Accepted Answer

If managers use cost information to guide pricing decisions and they have under-costed certain outputs, they are likely to underprice these outputs. This will result in increased demand for these outputs, but since profit margins will also be reduced due to underpricing, profit will fall.

Where Managers Use Cost Information About Outputs to Guide Pricing