One Pitfall of Cost-Plus Pricing for the Buyer Is That

question 169

True/False

One pitfall of cost-plus pricing for the buyer is that the seller may increase costs to establish a larger profit base.

---

Definitions:

Traveler's Check

A preprinted, fixed-amount check designed to allow the person signing it to make an unconditional payment to someone else as a result of having paid the issuer for that privilege.

Instrument

A formal document, especially one that legally records a fact, act, or agreement.

Enforceable Contract

A legally binding agreement that can be upheld and compelled in a court of law.

Negotiability

The quality of a financial instrument that allows it to be transferred from one party to another with minimal legal restrictions.