Pricing Constraints Refer to

question 150

Multiple Choice

Pricing constraints refer to

• A)barriers that must be overcome in order to set pricing objectives.
• B)competitive pricing advantages one firm has over another.
• C)different pricing strategies for each of the firm's products.
• D)factors that limit the range of prices a firm may set.
• E)barriers to entry a firm faces when launching a new product.

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Definitions:

Prime Cost

The sum of direct materials cost and direct labor cost, representing the direct production costs.

Cost Structure

The composition of different types of costs within a company or specific project, often categorized into fixed and variable costs.

Contribution Margin

The amount of revenue remaining after deducting variable costs, which can then be used to cover fixed costs and contribute to profit.

Product Mix

The variety of products that a company produces or sells, considering the diversity in type, size, and quality.