An External Issue to Be Considered When Setting a Price

question 48

Multiple Choice

An external issue to be considered when setting a price is

• A)the variable costs of the product or service.
• B)the desired rate of return.
• C)the quality of materials and labor.
• D)the number of competing products or services.

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Definitions:

Financial Intermediaries

Entities such as banks, insurance companies, and investment firms that facilitate transactions between savers and borrowers by channeling funds from those who save to those who need to borrow.

Commercial Banks

Financial institutions that accept deposits from the public, offer various savings products, and provide loans including personal, mortgage, and business loans.

Insurance Companies

Businesses that provide coverage, in the form of compensation resulting from loss, damages, injury, treatment, or hardship in exchange for premium payments.

Money Market Security

Short-term financial instruments, typically debt-based, that are highly liquid and considered to have low risk.