What Pricing Method Is Often Used Because of the Difficulty

question 350

Multiple Choice

What pricing method is often used because of the difficulty in establishing a benchmark of sales or investment to show how much of a firm's effort is needed to achieve the target?

• A)target return-on-investment pricing
• B)target return-on-sales pricing
• C)standard markup pricing
• D)target pricing
• E)loss-leader pricing

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Definitions:

Percentage

A way of expressing a number as a fraction of 100, used to compare proportions.

Land

In addition to the part of the earth’s surface not covered by water, this term refers to any and all natural resources (“free gifts of nature”) that are used to produce goods and services. Thus, it includes the oceans, sunshine, coal deposits, forests, the electromagnetic spectrum, and fisheries. Note that land is one of the four economic resources.

User Costs

Expenses incurred by consumers for the use of a good, service, or asset, including maintenance, repair, and operational costs.

Total Cost Line

A graphical representation showing the total cost of producing varying quantities of output.