Question

Chris and his best friend Jason have just opened a specialty beer bar in Phoenix, Arizona. They know the bottom-line profit they want to turn their first month, so they set the price accordingly. Chris and Jason are using:__________.

a. Penetration pricing
b. Price skimming
c. Target return on investment (ROI)
d. Competitor-based pricing
e. Value pricing

Answer 1

c. Target return on investment (ROI)

Step-by-step explanation:

While deciding the price, they used the bottom-line profit. It means they decided the target profit which they require from this business and added cost in it to calculate the price to charge for desired profit.

This is termed as the Target return on Investment (ROI).

In this method of determining the price of the the profit rate remains the same because prices are based on the return rate.

Answer 2

c.

Step-by-step explanation:

Based on the scenario being described within the question it can be said that Chris and Jason are using Target return on investment (ROI). This is a pricing model that places a specific price on the business based on the capital that an investor would want to make from their investment in the company stocks. Which is what Chris and Jason have done by setting the price based on what they want to make that month.