The Strategy of Charging Prices Based on Consumer Demand Rather

question 304

Multiple Choice

The strategy of charging prices based on consumer demand rather than cost or a predetermined profit margin represents

• A) competition-based pricing.
• B) cost-based pricing.
• C) target orientation.
• D) demand-oriented pricing.

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Definitions:

Depreciable Base

The cost of an asset less its salvage value, representing the total amount that can be depreciated over its useful life.

Residual Value

Residual value is the estimated value of an asset at the end of its useful life, reflecting what it could be sold for or its salvage value.

Fixed-Percentage Method

The Fixed-Percentage Method is a depreciation technique where a constant percentage of the asset's book value is depreciated each year, resulting in decreasing annual depreciation expenses.

Residual Value

The estimated amount that an asset is expected to realize upon its disposal at the end of its useful life.