When Finally Setting the Actual Price of Your Product or Service,there

question 13

Multiple Choice

When finally setting the actual price of your product or service,there are several contextual factors including your company objectives,your marketing strategy,competition,channels of distribution,and legal and regulatory issues to consider.Which of the following statements is not true when considering these factors?

• A) The customer's end price is usually higher than your price due to price escalation.
• B) Pricing off a competitor's price is as easy as picking a percent,say 80%,and charging that price for your product or service.
• C) Some forms of price discrimination are illegal.
• D) Firms that compete on price may experience negative growth.

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Definitions:

Direct Method

A cash flow statement presentation method that shows actual cash flows from operating activities, detailing specific sources and uses of cash, as opposed to the indirect method which adjusts net income for non-cash transactions.

Dividends

Regular payments made by a corporation to its shareholders out of its profits or reserves.

Financing Activities

Transactions that result in changes in the size and composition of the equity and borrowings of an entity.

Marketable Securities

Financial instruments that are easily convertible into cash and are therefore considered very liquid.