Which of the Following Is Not an Advantage Cost-Plus Pricing

question 252

Multiple Choice

Which of the following is not an advantage cost-plus pricing?

• A) It leads to profit maximization.
• B) It is an easy method to implement if a firm produces multiple products and has overhead costs that are difficult to allocate to a particular good.
• C) It could lead to price stability if the industry is made up of identical firms all using the same method of pricing.
• D) It is easy to justify price increases when total costs of production increase.

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Definitions:

Profit Centres

Segments or units within an organization that are responsible for generating revenue and are assessed based on their profitability.

Paired Stimuli

In psychology and marketing, the presentation of two stimuli together so that the response to one can be measured or influenced by the other.

High-traffic Areas

Locations or spaces that receive a large number of visitors or passersby, often requiring special consideration in design and maintenance.

Looking-glass Self

A concept in sociology that suggests an individual's self-concept is influenced by how they believe others perceive them.