Sometimes Managers Price Their Products Too Low,resulting in a Loss

question 52

Multiple Choice

Sometimes managers price their products too low,resulting in a loss of company profits.One reason this happens is that:

• A) managers attempt to buy market share through aggressive pricing,but the cuts are quickly met by competitors,which wipe out any gain in market share
• B) consumers tend to equate lower prices with low-quality goods,and they are never able to regain that lost market share
• C) price-skimming strategies only work in the short-term,and always eventually result in lower profits
• D) most managers simply lack good business sense,especially in regard to finances
• E) all of the above are reasons

Understand the concept of business combinations and the process of acquiring a subsidiary company.

Learn the computation of purchase consideration and how to allocate it to acquired assets and liabilities at their fair values.

Understand the concept of goodwill, its computation, and the impairment review process.

Learn about the equity method, partial equity method, and initial value method for investment accounting.

---

Definitions:

Autonomy Support

Providing support for individuals to make their own choices and take initiative in their actions.

Self-Determination Theory

A psychological theory of motivation that emphasizes the role of intrinsic motivations and the need for autonomy, competence, and relatedness.

Self-Determination Theory

A theory of motivation that posits that people are most fulfilled and motivated when they perceive that they have autonomy, competence, and relatedness.

Performance Evaluation System

A structured process used by organizations to assess and review an employee's job performance and productivity.