Is the Critical Assumption When Using Target Profit Pricing

question 265

Multiple Choice

is the critical assumption when using target profit pricing?

• A) a higher average price will usually cause the demand to fall
• B) a higher average price will always cause the demand to fall
• C) profit is relative to the current value of the dollar so this form of pricing is extremely risky
• D) a higher average price will not cause the demand to fall
• E) if the average price is increased, all of a firm's competitors will do the same

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Definitions:

Confidence Level

A statistical measure that quantifies the uncertainty or certainty in a sampling method.

Margin of Error

A measure of the accuracy of a public opinion poll, reflecting the maximum expected difference between the poll's results and the actual opinion of the total population.

Experimental Result

The outcome or data obtained from conducting a scientific experiment.

Populism

A belief in the wisdom of the common people and in the equality of all people.