A negative aspect of selecting unit volume as a pricing objective is that
A) production often cannot keep up with demand.
B) there are increased carrying costs with extensive inventories.
C) if price reductions are used to achieve volume objectives, it can sometimes come at the expense of profits.
D) it can create competition between divisions within the organization itself, causing conflicts over the allocation of resources.
E) it always positively correlates with a sales revenue objective.

Question

Quizplus · Accepted Answer

If price reductions are used to achieve volume objectives, it can sometimes come at the expense of profits, as lowering prices to increase volume may reduce the overall profit margin.

A Negative Aspect of Selecting Unit Volume as a Pricing