Which of the Following Statements Is True of Pricing Decisions

question 46

Multiple Choice

Which of the following statements is true of pricing decisions?

• A)Market-based pricing starts with a good understanding of customer needs and the benefits that a product offers relative to competitors' products.
• B)The business with the lowest price will always offer customers the best economic value.
• C)It is possible to implement market-based pricing with low levels of customer and competitor intelligence.
• D)Competitors' product-price positioning and company product-price positioning are the two primary determinants in setting a cost-based price.
• E)Cost-based pricing takes into account what the customer would be willing to pay for a certain level of product performance.

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Definitions:

Foreign Tax Credit

A tax credit that reduces the tax liability of an individual or entity for certain taxes paid to foreign governments.

Form 1116

A tax document used to claim foreign tax credit that reduces double taxation by the United States on income earned abroad.

Passive Income

Income earned from rental property, limited partnerships, or other enterprises in which a person is not actively involved.

Foreign Tax Credit

A nonrefundable tax credit for income taxes paid to a foreign government as a result of foreign income tax withholdings.