To use yield management strategies a business should have which combination of costs?
A) high variable and high fixed
B) low variable and high fixed
C) high variable and low fixed
D) low variable and low fixed
E) mixed variable and semi-fixed

Question

Quizplus · Accepted Answer

Yield management strategies involve adjusting prices based on demand to maximize revenue. To do this effectively, a business should have low variable costs (so that they can adjust prices without significantly altering their profit margins) and high fixed costs (so that they have a significant amount of money invested in their operations and need to maximize revenue to cover these costs). Therefore, option B (low variable and high fixed costs) is the best choice.

To Use Yield Management Strategies a Business Should Have Which