Using normal capacity for pricing decisions can lead to setting noncompetitive selling prices.

Name: Using normal capacity for pricing decisions can lead to setting noncompetitive selling prices.
Brand: Quizplus
Rating: 4.8 (38 reviews)

Question

Quizplus · Accepted Answer

Normal capacity represents the level of production that a business can sustain over the long term without strain. However, setting selling prices based on normal capacity alone can overlook the impact of competitors and the demand for the product, leading to noncompetitive pricing that may deter customers.

Using Normal Capacity for Pricing Decisions Can Lead to Setting