a demand revenue b production and marketing profit c demand target sales d cost

A demand revenue b production and marketing profit c

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a. demand; revenue b. production and marketing; profit c. demand; target sales d. cost; production and marketing costs e. cost; consumer demand Answer: d Page(s): 347 LO: 1 AACSB: Analytic QD: Medium Rationale: With cost-oriented approaches to pricing, a price setter stresses the cost side of the pricing problem, not the demand side. Price is set by looking at the production and marketing costs and then adding enough to cover direct expenses, overhead, and profit. 14-124 COST-ORIENTED APPROACHES COMPREHENSION Which of the following statements regarding cost-oriented approaches is most accurate? a.These methods focus on the demand side of the pricing problem.b.These methods focus on production and marketing expenses.c.Target return on investment is an example of a cost-oriented method.d.Experience curve pricing is simple to use because costs predictably decrease by 25 percent with each doubling of production.e.Cost-oriented approaches are subcategories of competition-oriented methods.Answer:bPage(s):347 LO: 1 AACSB: Analytic QD: Medium - 41 -
Rationale:With cost-oriented approaches, a price setter stresses the cost side of the pricing problem, not the demand side. Price is set by looking at production and marketing costs and then adding enough to cover direct expenses, overhead, and profit. 14-125 STANDARD MARKUP PRICING COMPREHENSION Standard markup pricing is considered to be a __________ approach to pricing. a. demand-oriented b. profit-oriented c. cost-oriented d. competition-oriented e. service-oriented Answer: c Page(s): 345, 347-348 LO: 1 AACSB: Analytic QD: Medium Rationale: Standard markup is a cost-oriented approach for selecting an approximate price level. See Figure 14-2 in the textbook. 14-126 STANDARD MARKUP PRICING KNOWLEDGE Standard markup pricing refers to LO: 1 AACSB: Analytic QD: Easy Rationale: Key term definition—standard markup pricing. 14-127 STANDARD MARKUP PRICING KNOWLEDGE

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