All of the Following Are Disadvantages of Cost-Plus Pricing Except

question 103

Multiple Choice

All of the following are disadvantages of cost-plus pricing except

• A)It ignores the price elasticity of demand: for example, it may be possible to increase profits by raising or lowering price.
• B)If the industry comprises identical firms (with identical costs), markups could be consistent among firms leading to no one firm having a competitive edge in terms of price.
• C)Allocating and apportioning business overheads to individual products could be somewhat arbitrary.
• D)The business has less incentive to cut or control costs: if costs increase, then selling prices increase. Consequently, this might further erode a firm's competitiveness.

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Definitions:

Functionalists

Functionalists focus on how society's parts are structured to maintain its stability, with each part contributing to society's overall function and health.

Class Differences

Variations in social standing, wealth, education, and power among different social groups, often leading to inequality.

Fashion Trends

The prevailing styles and preferences in clothing, accessories, and overall appearance at a particular time, often influenced by cultural and social factors.

Postindustrial Revolution

The phase following the Industrial Revolution, characterized by a shift from manufacturing-based economies to service-oriented and information-based ones.