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Important for :
1
All of the following would be considered to be among the internal factors that affect price decisions EXCEPT:
» Explain it
A
Competition is an external factor.

Option 'A' hence is the correct answer.
2
All of the following would be considered to be among the external factors that affect price decisions EXCEPT:
» Explain it
D
Cost is an internal factor.

Option 'D' hence is the correct answer.
3
A company must pay each month’s bills for rent, heat, interest, and executive salaries. Such costs would most appropriately be labelled as:
» Explain it
C
In management accounting, fixed costs are defined as expenses that do not change as a function of the activity of a business, within the relevant period.

Ex. A retailer must pay rent and utility bills irrespective of sales.

Option 'C' hence is the correct answer.
4
If a seller were to set prices based on buyers’ perceptions of value rather than on the seller’s costs, the seller would be using which of the following forms of pricing?
» Explain it
D
Value-based pricing (also value optimized pricing) is a pricing strategy which sets prices primarily, but not exclusively, on the value, perceived or estimated, to the customer rather than on the cost of the product or historical prices.

Option 'D' hence is the correct answer.
5
When demand elasticity is hard to measure, firms feel that ________ form of pricing makes sense. The idea is that the collective wisdom of the industry will produce a price that will yield a fair return. Which of the following pricing methods is most appropriate to the description just given?
» Explain it
D
Going rate pricing is a common practice with homogeneous products with very little variation from one producer to another, such as aluminum or steel.

Option 'D' hence is the correct answer here.