When Making Normal Pricing Decisions, Management Should Consider

question 51

Multiple Choice

When making normal pricing decisions, management should consider:

• A) Differential costs and markup amount
• B) Variable costs and direct fixed costs only
• C) Total costs and markup amount
• D) Variable costs only

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Definitions:

Tying

Practice of requiring a customer to purchase one good in order to purchase another.

Price Discrimination

The strategy of selling the same product at different prices to different groups of buyers, often based on their willingness to pay.

Market Power

The ability of a company or entity to influence the price and production levels in a market.

Two-part Tariff

A pricing strategy that consists of a fixed fee plus a variable charge for actual consumption.