In which situation should an entrepreneur consider changing pricing?
Answer and explanation
Correct answer: When cost and customer value are changing
Pricing should reflect the cost of providing the product, the value customers perceive, demand, and competitive conditions. If costs rise or the customer’s perceived benefit changes, the old price may reduce profit, sales, or both. The entrepreneur should analyse evidence before revising price and may also improve the product or process. A liked name, shop colour, or friends’ praise is not sufficient pricing evidence.
Frequently asked questions
What is the correct answer to this question?
When cost and customer value are changing
Why is this the correct answer?
Pricing should reflect the cost of providing the product, the value customers perceive, demand, and competitive conditions. If costs rise or the customer’s perceived benefit changes, the old price may reduce profit, sales, or both. The entrepreneur should analyse evidence before revising price and may also improve the product or process. A liked name, shop colour, or friends’ praise is not sufficient pricing evidence.
Which subject and chapter does this question cover?
This is a Class 11 Business Studies question. Chapter: MSME and Business Entrepreneurship. Topic: Entrepreneurship Development.
