Why is adding only cost not enough while deciding price?
Answer and explanation
Correct answer: Because customer value, competition, and demand also matter
Cost helps establish a minimum financially sensible price, but pricing also depends on the value customers perceive, competing offers, demand conditions, and the enterprise’s objectives. Ignoring these factors may produce a price customers reject or a price that misses possible value. Cost therefore matters, but it is not the only consideration; A is correct.
Frequently asked questions
What is the correct answer to this question?
Because customer value, competition, and demand also matter
Why is this the correct answer?
Cost helps establish a minimum financially sensible price, but pricing also depends on the value customers perceive, competing offers, demand conditions, and the enterprise’s objectives. Ignoring these factors may produce a price customers reject or a price that misses possible value. Cost therefore matters, but it is not the only consideration; A is correct.
Which subject and chapter does this question cover?
This is a Class 11 Business Studies question. Chapter: MSME and Business Entrepreneurship. Topic: Entrepreneurship Development.
