Jian Has Entered into a Contract with the Federal Government

question 14

Multiple Choice

Jian has entered into a contract with the federal government to design a computer simulation model for training helicopter pilots. The contract calls for the final price to be set at a fixed percentage profit over and above her cost of production. This seems to represent a:

• A) cost-based pricing strategy.
• B) supply and demand formula.
• C) demand-based pricing strategy.
• D) price leadership pricing strategy.

---

Definitions:

Concept Testing

The process of evaluating consumer response to an idea or prototype before a product is launched or a significant investment is made.

Diffusion of Innovations

The process by which a new idea, product, or behavior is adopted by a population, spreading through various communication channels over time.

Adoption Process

The series of stages consumers go through when deciding whether to purchase a new product or service, including awareness, interest, evaluation, trial, and adoption.

Branding Process

The series of strategies and actions a company undertakes to develop a strong and consistent identity in the market that resonates with its target audience.