Question

Regarding the Cost-Plus pricing, which of the following statement is NOT true? It is a pricing strategy liked by the Finance department It supports price differentiation It calculates the price based on the cost plus a standard margin It is an entirely inward-focused strategy that has nothing to do with the market and competition

Answer 1

Answer: It supports price differentiation

Step-by-step explanation:

Cost-plus pricing works by adding a standard margin to the cost of producing or acquiring a good. The margin will be the gross profit per unit.

This does not support price differentiation because it would lead to the same price being charged to all customers for the goods regardless of who the customers are, whereas price differentiation calls for different types of customers to be charged different prices.