Bennett Has Entered into a Contract with the Federal Government

question 35

Multiple Choice

Bennett has entered into a contract with the federal government to design a computer simulation model for training helicopter pilots. The contract calls for the final price to be set at a fixed percentage profit over and above her cost of production. This seems to represent a

• A) cost-based pricing strategy.
• B) supply and demand formula.
• C) demand-based pricing strategy.
• D) price leadership pricing strategy.

Identify and apply the most appropriate method of establishing probability based on the nature of the event or outcome under consideration.

Understand the concept of subjective assessment in determining probabilities.

Understand and apply different methods for establishing probabilities (method of equal alternatives, method of frequency, intuitive judgment, counting method).

Distinguish between situations where each outcome has a different probability and those where they do not.