Which of the following is true of the rate-of-return approach to pricing?
A)Rate-of-return pricing is commonly used by manufacturers.
B)Rate-of-return pricing is a psychological pricing strategy.
C)Rate-of-return pricing does not involve circular reasoning.
D)Rate-of-return pricing places maximum emphasis on estimating sales volume.

Question

Quizplus · Accepted Answer

The rate-of-return approach to pricing is commonly used by manufacturers as it focuses on determining the price that will provide a desired rate of return on investment for the company. This approach involves calculating the total cost of producing and distributing the product and then adding a markup to the cost to determine the selling price.

Which of the Following Is True of the Rate-Of-Return Approach