When a firm bases its price largely on competitors' prices, it is using a pricing strategy that is called
A) going-rate pricing.
B) value pricing.
C) everyday low pricing.
D) perceived value pricing.
E) high-low pricing.

Question

Quizplus · Accepted Answer

Going-rate pricing, also known as competitive pricing, is a pricing strategy in which a firm bases its price largely on competitors' prices. This strategy is common in industries where there are many competitors and products are similar. The firm will set its price around the average price of its competitors or slightly below or above it, depending on its objectives.

When a Firm Bases Its Price Largely on Competitors' Prices