In General, Prices Should Not Be Based on Costs Because

question 28

Multiple Choice

In general, prices should not be based on costs because

• A)consumers are cost-conscious.
• B)producers rarely know what their costs are.
• C)consumers make their purchase decisions based on perceived value.
• D)producers need to avoid creating a cost competitive parity debate.
• E)customers are always right.

---

Definitions:

Manufacturing Cost

The total expense incurred in producing goods, including raw materials, labor, and overhead.

Outsourcing Decision

The process by which a company decides whether to purchase a good or service from an external provider instead of producing it internally, often influenced by factors like cost, expertise, and capacity.

Spreadsheet

A digital worksheet used for organizing, analyzing, and storing data in a tabular form.

Profit Generated

The total earnings resulting from business activities after subtracting all expenses and costs.