Consider the following statements about pricing:
I. Prices are often determined by the market, subject to the constraint that costs must be covered in the long run.
II. Prices are often based on costs, subject to the constraint that customers and competitors will exert an influence.
III. A balance of market forces and cost is important when making pricing decisions.
Which of the above statements is (are) true?
A) I only.
B) II only.
C) I and III.
D) II and III.
E) I, II, and III.

Question

Quizplus · Accepted Answer

All three statements are true. Statement I highlights the market's role in determining prices while emphasizing the need to cover costs in the long run. Statement II acknowledges the influence of costs on pricing decisions but also considers the impact of customers and competitors. Statement III underlines the importance of balancing market forces and costs in pricing decisions.

Consider the Following Statements About Pricing