Although break-even analysis and cost-plus pricing are important tools in setting prices based on the firms cost structure, they should never be the driving force behind pricing strategy. Why?
a.
Because firms want to make a profit, not just break even.
b.
Because customer expectations are far more important in setting prices.
c.
Because prices should be based on demand, not costs.
d.
Because different firms have different cost structures.
e.
Because competitors prices are far more important in setting prices.
Answer: d.
Because different firms have different cost structures.