Average-cost pricing:
A) May be very profitable if actual sales are higher than expected.
B) May lose money for the firm if actual sales are less than expected.
C) Does not take demand into account in setting prices.
D) Is simple in theory but often fails in practice.
E) All of the above.

Question

Quizplus · Accepted Answer

Average-cost pricing can be profitable if sales exceed expectations (A), can result in losses if sales fall short (B), ignores demand factors (C), and is theoretically simple but practically challenging (D).

Average-Cost Pricing