Which of the following statements regarding cost-oriented approaches is most accurate?
A)These methods focus on the demand side of the pricing problem.
B)These methods focus on production and marketing expenses.
C)Target return on investment is an example of a cost-oriented method.
D)Experience curve pricing is simple to use because costs predictably decrease by 25 percent with each doubling of production.
E)Cost-oriented approaches are a subcategory of competition-oriented methods.

Question

Quizplus · Accepted Answer

Cost-oriented approaches focus on analyzing production and marketing expenses to set prices. Option A is incorrect as demand-oriented approaches focus on understanding customer demand to set prices. Option C is partially correct, as target return on investment is a cost-oriented method, but it is not an exclusive example. Option D is incorrect as experience curve pricing is a form of competition-oriented pricing based on the firm's learning curve. Option E is incorrect as cost-oriented approaches are a separate category from competition-oriented methods.

Which of the Following Statements Regarding Cost-Oriented Approaches Is Most