A Pricing Method Where a Supplier Is Reimbursed for All

question 122

Multiple Choice

A pricing method where a supplier is reimbursed for all costs, regardless of what they may be, and who also receives an agreed upon dollar amount of profit that is independent of the final cost of the project, is referred to as

• A)target return on investment pricing.
• B)cost-plus-percentage-of-cost pricing.
• C)target return on sales pricing.
• D)experience curve pricing.
• E)cost-plus-fixed-fee pricing.

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Definitions:

Long-Run Equilibrium

A situation in which all firms in a market are making zero economic profit, leading to a stable market condition where no new firms enter or exit.

Consumer Preference

The subjective tastes and preferences of consumers, which determine the demand for different goods and services.

Efficiency

The extent to which resources are used optimally to achieve the desired outcomes with minimum waste.

Partial Equilibrium

An analysis focusing on the equilibrium in a single market without considering its effects on or from other markets.