What Is Usually the First Step in Cost-Based Pricing

question 22

Multiple Choice

What is usually the first step in cost-based pricing?

• A) testing the product concept with potential customers
• B) determining the marketing mix strategy
• C) setting a price that covers costs plus a target profit
• D) designing a good product
• E) adding up the costs of making the product

---

Definitions:

Years

Units of time that represent a period approximately equal to 365 days, used to measure duration or age.

Economic Profits

The surplus remaining after subtracting both the explicit and implicit costs from total revenues.

Productive Land Resources

Refers to natural resources that can be used for production purposes, such as agriculture, mining, and forestry.

Perfectly Inelastic

Describes a situation in economics where the quantity demanded or supplied does not change in response to a price change.