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Business Studies

Production Concept and Product Concept

Pricing strat...

Question

Pricing strategy in which prices are based on cost of distribution and production plus fair return rate is called as _______.

A

Cost based pricing

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B

Differentiated pricing

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C

Competitive pricing

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D

Value added pricing

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Solution

The correct option is C Cost based pricing
Cost based pricing is the easiest way to calculate what a product should be priced at. Full cost pricing takes into consideration both variable, fixed costs and a percentage markup.

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