Which of the following is not an advantage cost-plus pricing?
A) It leads to profit maximization.
B) It is an easy method to implement if a firm produces multiple products and has overhead costs that are difficult to allocate to a particular good.
C) It could lead to price stability if the industry is made up of identical firms all using the same method of pricing.
D) It is easy to justify price increases when total costs of production increase.

Question

Quizplus · Accepted Answer

Cost-plus pricing does not necessarily lead to profit maximization because it does not take into account the demand side of the market or competitive pricing strategies.

Which of the Following Is Not an Advantage Cost-Plus Pricing