World-Class Organizations Operating in Competitive Markets Are More Likely to Take

question 13

Multiple Choice

World-class organizations operating in competitive markets are more likely to take which one of the following approaches toward pricing?

• A)Begin with cost data as given and determine price by adding a reasonable mark-up.
• B)Determine price based on the amount management believes customers are willing to pay.
• C)Employ a cost-based approach to pricing.
• D)Determine the price that keeps the facilities fully utilized.

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Definitions:

Duopoly

A market structure dominated by two companies, resulting in limited competition.

Demand Curve

A chart depicting how the price of an item correlates with the amount of that item consumers are ready and capable of buying at different price levels.

Marginal Cost

The extra cost involved in producing one more unit of a product or service.

Cartel

An association of independent companies or organizations formed to control production, pricing, and marketing of goods to suppress competition.