When Pricing a New Product, a Small Business Owner Should

question 42

Multiple Choice

When pricing a new product, a small business owner should strive to always satisfy which three objectives?

• A)Product acceptance, maintaining market share, and earning a profit.
• B)Quick acceptance, extensive distribution, and quickly recovering costs.
• C)Recovering initial development costs, recovering initial promotional costs, and discouraging competition.
• D)Discouraging competition, recovering development costs, and developing a prestige image.

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Definitions:

Service Companies

Businesses that provide services to consumers or other businesses rather than producing goods.

Activity-Based Costing

A pricing approach that allocates overhead and indirect expenses to associated goods and services according to their consumption of resources.

Product Costs

Costs that are directly associated with the creation of a product, including materials, labor, and manufacturing overhead.

Activity-Based Costing

A pricing technique that allocates overhead and indirect expenses to corresponding products and services according to the activities they necessitate.