Which Pricing Strategy Has the Advantage of Being Simple to Calculate

question 104

Multiple Choice

Which pricing strategy has the advantage of being simple to calculate but has the disadvantage of ignoring demand and competitive conditions?

• A)gray marketing
• B)skimming
• C)penetration
• D)market holding
• E)cost-based

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Definitions:

Residual Income

The income that remains after deducting all required costs of capital from the operating income.

Imputed Interest

The interest that is considered or assumed to be charged on an interest-free loan or bond, often for tax calculations.

Residual Income

The income that remains after subtracting all the costs of capital from the net operating income.

Net Operating Income

Earnings before interest and taxes (EBIT), a measure of a company's profitability from operations.