If PepsiCo Sets Its Twelve-Pack Price at $3

question 121

Multiple Choice

If PepsiCo sets its twelve-pack price at $3.99 to match the price charged by Coca-Cola,Pepsi is using which of the following pricing methods?

• A) Demand-based
• B) Cost-based
• C) Reference pricing
• D) Competition-based
• E) Price leader

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Definitions:

Estimated Total Cost

An approximation of the total cost associated with a project or production, including all relevant expenses.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, making it more useful for controlling costs and planning.

Static Budget

A fixed budget that does not change or adjust to variations in sales volumes or business activity levels throughout the period.

Activity Levels

Various measures of operations or production quantity, such as units produced or hours worked, which can impact costs and managerial decisions.