A weakness associated with cost-based pricing methods is that they
A) are too difficult to calculate.
B) do not consider profit when calculating.
C) do not recognize the role consumers or competitors' prices play in the marketplace.
D) do not consider fixed or variable costs.
E) are structurally inflexible and ignore vertical price-fixing alternatives.

Question

Quizplus · Accepted Answer

Cost-based pricing methods only consider the cost of producing a product or service, without taking into account what consumers might be willing to pay or what competitors are charging for a similar product or service. This can lead to pricing that is not competitive in the marketplace and may result in lower sales and profits.

A Weakness Associated with Cost-Based Pricing Methods Is That They