Jian Has Entered into a Contract with the Federal Government

question 14

Multiple Choice

Jian has entered into a contract with the federal government to design a computer simulation model for training helicopter pilots. The contract calls for the final price to be set at a fixed percentage profit over and above her cost of production. This seems to represent a:

• A) cost-based pricing strategy.
• B) supply and demand formula.
• C) demand-based pricing strategy.
• D) price leadership pricing strategy.

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Definitions:

Liquid Market

A market with a high level of trading activity, where assets can be bought or sold quickly without causing a significant change in their price.

Investment Banks

Financial institutions that assist individuals, corporations, and governments in raising capital by underwriting and acting as the agent in the issuance of securities.

Commercial Banks

Financial institutions that provide loans, accept deposits, and offer basic financial products like savings accounts to the public.

Financial Matters

Issues or activities related to the management, investment, and control of money and assets.