This Approach to Pricing, in Which the Price Charged to the Customer

question 11

Multiple Choice

This approach to pricing, in which the price charged to the customer or client is set to cover what it costs the organization to produce or provide it, is called:

• A) cost-oriented pricing.
• B) value-based pricing.
• C) competition-oriented pricing.
• D) price discrimination.

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Definitions:

Sunk Cost

Past expenses that have already been incurred and cannot be recovered or altered.

Nonrefundable Ticket

A type of ticket purchase that cannot be returned for a refund. These tickets generally offer a cost advantage but less flexibility.

Wear and Tear

The damage or deterioration resulting from ordinary use over time.

MC Curves

also known as Marginal Cost Curves, represent the additional cost incurred in producing one more unit of a good or service.