What Is an Organization Using When It Sets Its Prices

question 52

Multiple Choice

What is an organization using when it sets its prices so that total revenue is as large as possible relative to total costs?

• A)profit maximization
• B)market share pricing
• C)demand-oriented pricing
• D)status quo pricing

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Definitions:

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, commonly used in finance to assess the volatility of an investment.

Single-index Model

A model of stock returns that decomposes influences on returns into a systematic factor, as measured by the return on a broad market index, and firm-specific factors.

Systematic Component

The part of an investment’s return or risk that is attributable to broad market factors affecting all investments to some degree.