In the cost-plus method of pricing, there is one major drawback that sometimes precludes exports from using it. What is this drawback?
A) The cost of the final price may be so high that the firm's competitiveness is compromised.
B) It is so variable that the actual price cannot be substantiated.
C) There is high turnover of product resulting in costing fluctuations.
D) Each of the elements has to be examined individually, providing complex structures grids.

Question

Quizplus · Accepted Answer

The major drawback of the cost-plus method of pricing is that the cost of the final price may be so high that the firm's competitiveness is compromised. This can be especially problematic when pricing for export markets, where foreign competitors may offer similar products at a lower price. Therefore, firms may need to consider alternative pricing strategies to maintain their competitiveness in the global marketplace.

In the Cost-Plus Method of Pricing, There Is One Major