Key to Setting a Final Price for a Product Is

question 13

Multiple Choice

key to setting a final price for a product is finding an approximate price level to use as a reasonable starting point.Four common approaches to selecting an approximate price level are: (1) demand-oriented; (2) cost-oriented; (3) profit-oriented; and (4) __________ approaches.

• A) revenue-oriented
• B) distribution-oriented
• C) stakeholder-oriented
• D) competition-oriented
• E) cause-oriented

Recognize the significance of the availability of substitutes on the elasticity of demand.

Interpret demand curves and the elasticity at various points.

Comprehend the relationship between demand elasticity and revenue changes.

Understand the characteristics and objectives of scientific inquiry.

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Definitions:

Scenario Analysis

A business planning technique in which the implications of variations in planning assumptions are explored. Also known as “what-if-ing.”

Abandonment Option

A financial decision allowing companies to cease a project or investment to avoid further losses.

NPV

Net Present Value; a calculation used to assess the profitability of an investment, considering the present value of its cash flows.

Variances

Differences between planned financial outcomes and actual results, used in budgeting and financial management to analyze performance.