Setting a Price to Achieve an Annual Target Return-On-Investment (ROI)

question 73

Multiple Choice

Setting a price to achieve an annual target return-on-investment (ROI) is referred to as

• A) target return-on-investment pricing.
• B) target return-on-profit pricing.
• C) target return-on-sales pricing.
• D) target profit pricing.
• E) customary pricing.

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Definitions:

Block Pricing Scheme

A pricing strategy where different quantities of a product or service are sold at different prices, typically decreasing with volume.

Marginal Cost

The increased cost resulting from the production of an extra unit of a product or service.

Consumer Surplus

The difference between the total amount consumers are willing and able to pay for a good or service and the total amount they actually pay.

Demand Curves

A graph showing the relationship between the price of a good and the quantity of the good that consumers are willing and able to purchase at various prices.