In an Effort to Differentiate Its Offerings from Its Competitors

question 81

Multiple Choice

In an effort to differentiate its offerings from its competitors, Pegasus Computers decided to add an extra USB port in all its laptops besides providing a free pair of Delphi power bass headphones with every Pegasus laptop. Although the additional features increased the price of the laptops by $500, Pegasus was confident that the strategy would help boost demand for its laptops substantially. This is an example of ________.

• A) good-value pricing
• B) markup pricing
• C) break-even pricing
• D) value-added pricing
• E) cost-based pricing

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Definitions:

Accrued Revenue

Revenue that has been earned but not yet received in cash or recorded by the accounting system.

Management Fees

Fees paid to managers for operating investment funds or managing assets.

Unrealised Profit

Profit that has been earned but not yet received in cash or recorded in the financial statements, often resulting from intra-company transactions.

Mark-up

The amount added to the cost price of goods to cover overhead and profit, determining the selling price.