If Demand Is Taken into Account, Firms That Use Cost-Plus

question 255

Multiple Choice

If demand is taken into account, firms that use cost-plus pricing can adjust price by

• A)letting sales fall, but hold the markup constant if demand falls.
• B)lowering markups on price-elastic goods and raising markups on price-inelastic goods.
• C)raising markups on price-elastic goods and lowering markups on price-inelastic goods.
• D)letting sales rise, but hold the markup constant if demand rises.

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Definitions:

Extrapolation

The process of estimating, beyond the original observation range, the value of a variable on the basis of its relationship with another variable.

Predictive Analysis

The process of selecting, exploring, analyzing, and modeling data to create better business outcomes.

Business Outcomes

The results, achievement, or consequences that a company experiences as a direct or indirect effect of its strategy and actions.

Technological Changes

The advancements and innovations in technology that alter how tasks are performed, services are delivered, and products are created or improved.