What is an organization using when it sets its prices so that total revenue is as large as possible relative to total costs?
A) sales maximization
B) profit maximization
C) status quo pricing
D) market share pricing

Question

Quizplus · Accepted Answer

Profit maximization is the process of setting prices that will yield the highest possible profit for a company relative to its total costs. This involves analyzing the market demand and determining the optimal price point for maximizing revenues while also minimizing costs. Ultimately, the goal is to achieve the highest possible profit margin for the company while maintaining a competitive price point that is attractive to customers. Sales maximization and status quo pricing are not focused on maximizing profits, while market share pricing is focused on gaining market share rather than maximizing profits.

What Is an Organization Using When It Sets Its Prices