Escalator Pricing and Price Shading Are Two Examples of Cost-Oriented

question 135

True/False

Escalator pricing and price shading are two examples of cost-oriented pricing tactics.

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Definitions:

Relative Opportunity Costs

The loss of potential gain from other alternatives when one alternative is chosen, expressed in terms of the ratio between the cost of the chosen alternative and the cost of the next best alternative.

Opportunity Cost

The cost of forfeiting the next best alternative when one option is chosen over another.

Comparative Advantage

The capability of a company, individual, or country to manufacture a product or offer a service with a reduced opportunity cost than competing entities.

Specialization

The process of focusing efforts and resources on a limited range of activities, goods, or services to gain efficiency or expertise.