Which of the Following Statements Is Most Accurate

question 62

Multiple Choice

Which of the following statements is most accurate?

• A) Nonprofit organizations are exempt from having to cover the costs of producing and/or marketing their products.
• B) Socially responsible corporations should have the pricing constraint of covering all costs of producing and marketing their products, but they should not price their products to earn a profit.
• C) Regardless of a company's constraints, a firm must cover all the costs of producing and marketing a product, or the firm will fail.
• D) Price elasticity of demand makes it virtually impossible for companies to cover all their marketing and production costs at all times.
• E) Marketing and production costs are the most difficult and expensive aspect of pricing because they draw so much capital away from other departments in the organization.

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Definitions:

Accord and Satisfaction

A legal settlement where a disputing party agrees to accept a payment or performance that is different from what was originally owed or expected, thereby settling the claim.

Preexisting Duty

An obligation that one party already legally owes to another under a contract, which cannot serve as consideration for a new contract.

Illusory Consideration

A promise or apparent agreement that lacks the actual commitment or substance to be legally enforceable as consideration in a contract.

Unliquidated Debt

A debt for which the exact amount owed has not been determined.