Experience-Curve Pricing Refers to

question 31

Multiple Choice

Experience-curve pricing refers to

• A) the method of pricing where the price of a product often rises following the expansion of costs associated with the firm's producing and selling an increased volume of the product.
• B) the point at which profits double, then double again, as more consumers buy the product.
• C) a predictive pricing plan based upon the knowledge that the prices will fluctuate in a predictable pattern within a given industry based on the diffusion of innovation.
• D) a method of pricing based on the learning effect, which holds that the unit cost of many products and services declines by 10 to 30 percent each time a firm's experience at producing and selling them doubles.
• E) a pricing strategy that uses price estimates based upon the consensus of the salesforce and the firm's top management team.

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Definitions:

Target Market

The specific group of consumers at which a company aims its products and services.

Quantity Sold

The total number of units of a product or service sold over a specific period of time.

Primary Demand

The overall demand for a product category or market as a whole, rather than for a specific brand.