If customers want the product but consider the price high, what should the entrepreneur check first?
Answer and explanation
Correct answer: Perceived value and cost structure
Customers judge a price in relation to the benefits and quality they believe they will receive. The entrepreneur should therefore compare perceived customer value with the cost structure, including materials, labour, and other expenses. This analysis may suggest improving benefits, reducing avoidable costs, or revising the price. Wall colour, employee height, and personal hobbies do not explain the pricing concern.
Frequently asked questions
What is the correct answer to this question?
Perceived value and cost structure
Why is this the correct answer?
Customers judge a price in relation to the benefits and quality they believe they will receive. The entrepreneur should therefore compare perceived customer value with the cost structure, including materials, labour, and other expenses. This analysis may suggest improving benefits, reducing avoidable costs, or revising the price. Wall colour, employee height, and personal hobbies do not explain the pricing concern.
Which subject and chapter does this question cover?
This is a Class 11 Business Studies question. Chapter: MSME and Business Entrepreneurship. Topic: Entrepreneurship Development.
