The Two Basic Approaches to Price Setting Are

question 51

Multiple Choice

The two basic approaches to price setting are

• A)supply-oriented and demand-oriented.
• B)cost-oriented and demand-oriented.
• C)sales-oriented and profit-oriented.
• D)cost-oriented and profit-oriented.
• E)average-cost pricing and break-even analysis.

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Definitions:

Depreciation

Depreciation refers to the accounting method of allocating the cost of a tangible asset over its useful life, representing how much of an asset's value has been used up over time.

Gross Investment

The total amount of money invested in capital assets before accounting for depreciation, representing all new investment in the economy.

Depreciation

The diminishing value of an asset over periods, often as a result of deterioration or becoming obsolete.

Inventory Investment

The purchase of goods and materials that are not currently needed for production but are held for future use, contributing to a company’s assets.