Which of the following is a drawback of cost-based pricing?
A) Sellers earn a fair return on their investment.
B) By tying the price to cost, sellers simplify pricing.
C) When all firms in the industry use this pricing method, prices tend to be similar.
D) This method ignores demand.
E) Without a standard markup, consumers don't know when they are being overcharged.

Question

Quizplus · Accepted Answer

Cost-based pricing ignores demand, which means that the price may not reflect what the market is willing to pay. This can result in lost sales and lower profits.

Which of the Following Is a Drawback of Cost-Based Pricing